Kuala Lumpur - Bernama
HwangDBS Vickers has trimmed Malaysia\'s total industry volume (TIV) estimate for the automotive sector this year by two per cent to 599,000 units from an earlier forecast of 611,000 units to reflect a longer-than-expected recovery post-Japan disasters. It said the lower forecast, also implied a one per cent drop year-on-year, was mainly derailed by components shortages after the Japan earthquake and tsunami in March and amendments to the Hire Purchase Act on June 15, which slowed down the car registration process. \"As a result, TIV slipped 19.5 per cent month-on-month in April; 9.6 per cent in May; and 9.2 per cent in June,\" it said in a research note today. The research house said full recovery in sales was expected to take a longer time amid lingering cautious consumer sentiment. However, HwangDBS Vickers expects the TIV for next year to grow by 3.8 per cent year-on-year to 622,000 on the back of 5.2 per cent GDP growth for the year. Accordingly, it has cut the sector\'s net profit by 3.4 per cent this year and 2.9 per cent next year after factoring in slightly higher promotional expenses such as rebates and free gifts. Top pick for the sector was MBM Resources which is rated with \"buy\" call but revised the target price to RM3.02 from RM3.90 while UMW Holdings was downgraded to \"hold\" from \"buy\" with a lower target price of RM6.43 from RM7.30.