KUALA LUMPUR: The national automotive policy (NAP) revision of encouraging the energy efficient vehicles (EEV) production hub in Malaysia is expected to improve the efficiency of the domestic automotive supply chain.
In a research note yesterday, Hong Leong Investment Bank (HLIB) said by supporting the changing landscape of the automotive industry, the move would benefit the larger automotive players like DRB and Mercedes Benz Malaysia (MBM).
“However, the local industry may face risks like slowdown in economy, global automotive supply chain disruption, announcement of immediate drastic cut in car prices and sudden jump in fuel prices and interest rate,” it said.
The research firm maintained its ‘overweight’ outlook on the automotive sector based on potential exports to the Asean market and implementation of energy efficient policy despite instability of the global automotive supply chain.
“We have adjusted higher earnings for DRB, on contribution of Volkswagen and Tan Chong Motor, on higher Nissan sales, but lowering earnings for
UMW, on lower Toyota sales with MBM’s earnings remaining unchanged,” it added. — Bernama