KUALA LUMPUR: Strong sales figures in 1Q22 are pointing towards even higher sales in the subsequent quarter as customers try to beat the expiry of the sales and service tax exemption in June 30, 2022.

       "The strong 1Q22 total industry volume (TIV)suggests a potentially stronger 2Q22 to come, as orders remain robust, with customers rushing to take advantage of the tax relief, and as car makers continue to ramp up production to meet demand," said RHB Research in a note.

       Data released by the Malaysian Automotive Association (MAA) showed total industry volume of 159,752 units in 1Q, which made up 30% of the research firm's previous full-year estimate.

       "1Q22 sales volume across major marques rose from 1Q21, where a series of movement restrictions impacted car sales," said RHB.

       Sales in March hit a monthly record high with Perodua sales rising 54% month-on-month (m-o-m) and Proton gaining 35% m-o-m.

       Among the non-national marques, Honda's sales climbed 75% m-o-m and Mazda posted a 357% m-o-m sales surge, likely owing to sufficient CBU orders from Japan and Thailand amid the chips and supply shortage.

       The research firm raised its TIV assumption to 580,000 from 540,000 on the back of the 1Q result.

       However, it noted that sales in 2H2022 are still expected to be soft despite the higher annual forecast.

       "Maintain 'neutral' on the sector, as lingering concerns of 2H22 margin pressure and 2023 excise duty reform may weigh on sector sentiment.

       "We favour MBM Resources for its sector-leading FY22F 7% yield," said RHB.