RHB Research cautious on automotive sector in 2012 as economy slows down

KUALA LUMPUR (Dec 28): RHB Research Institute said the more cautious
outlook and slowing economy in 2012 will likely see households and
businesses alike reassess spending on big-ticket items.

'We expect total industry volumes (TIV) to remain relatively flat at 607,000 units in 2012 (2011 estimate: 604,000).

'We see some selective supply constraints of certain models continuing
into 1Q12 arising from the flooding in Thailand, with Honda the most
severely affected,' it said on Wednesday.

RHB Research said with
2011 turning out to be a year to forget for the auto industry, it was
opting to remain cautious on the prospects for stocks in the sector and
reiterate its Underweight call as it looks ahead into 2012.

The
research house said other factors that bear a close watch over included
the forthcoming revision to the National Automotive Policy and forex
rates for the US dollar and yen.