Kenanga Analysis lauds govt’s transfer to allow for automotive plant functions

KUALA LUMPUR, Jan 18  — Kenanga Investigation has lauded the Ministry of Global Trade and Industry’s (MITI) move to reinstate automotive manufacturing in the authorised listing of solutions in economic sectors allowed to operate during the next Motion Control Buy (MCO 2.), starting off Jan 16, 2021.

In a note currently, it explained the choice was a constructive progress for the automotive field, supported by the extension of the Revenue and Services Tax-exempted sales up to June 30, 2021 to apparent the backlogged orders.

Based on the a short while ago unveiled details for 2020’s comprehensive-calendar year whole field volume (TIV), Perodua marketed 220,154 units, Toyota offered 59,320 units and Proton sold 109,716 models — all increased than their original focus on figures.

“Thus, we tweak 2020 TIV concentrate on larger to 515,000 units (-17 per cent 12 months-on-12 months) from 500,000 units earlier, and expecting a more robust restoration in 2021 with TIV concentrate on of 585,000 units (+14 for each cent 12 months-on-calendar year),” explained Kenanga Analysis, maintaining its “overweight” connect with for the market.

Vehicle manufacturing and component manufacturing were included in the original directive on MCO 2. issued on Jan 12, but an update to the document considerably less than 24 several hours thereafter noticed them remaining omitted, with a distinct footnote mentioning that automotive assembly and manufacturing things to do were no more time incorporated in the permitted checklist.

Now, in a different U-change, MITI has offered the eco-friendly mild for all automotive assembly plants masking auto and component manufacturing to proceed functions, introducing it to the listing of essential solutions. 

Beforehand, the ban was only applicable to states where the MCO is in result, particularly the Federal Territories of Kuala Lumpur, Putrajaya and Labuan, Selangor, Johor, Penang, Melaka and Sabah.

“This originally meant that Perodua Rawang Plant, equally Toyota’s Bukit Raja and Shah Alam vegetation, Proton’s Shah Alam plant and Honda’s Pegoh plant in Melaka were being impacted by the move,” stated Kenanga Investigation.

It observed that while assembly crops in other states underneath the recovery or conditional MCO these types of as the Hicom plant in Pekan, Pahang and the Inokom plant in Kulim, Kedah could keep on to operate, interruptions to their functions have been probably to materialize at some issue due to supply concerns.

“This is due to the fact their ability to function would be subjected to them getting equipped to safe sections, a little something that would be tough if component distributors inside the MCO places had been closed,” it included.