Weak outlook drives downgrade for auto stocks
The weak outlook for Malaysia’s automotive sector has prompted TA Research to downgrade auto stocks on Bursa Malaysia.
The research house downgraded its auto sector rating to “underweight” from “neutral”, driven by a lack of near-term catalysts to reverse the current overpriced valuation.
“Our 2025 total industry volume (TIV) forecast remains at 750,00 units, representing an 8.2% year-on-year (y-o-y) decline, underscoring the cautious outlook for the automotive sector,” it said in a sector report today.
Year to date, the TIV stands at 516,862 units (-4% y-o-y), reflecting overall cautious market sentiment, it said.
It added “intense price competition is expected to pressure margins”, suggesting that market share gains by any brands are likely achieved at the expense of profitability.
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