MIDF sees down trend for automotive
Published on: Thursday, March 26, 2020
By: Bernama
Kuala Lumpur: MIDF Research has revised downward its 2020 total industry volume (TIV) for the automotive industry to 581,367 units from 605,375 units forecasted previously, given the developing headwinds and the resultant downward revision to the country’s gross domestic product (GDP).In a research note Wednesday, MIDF said it now projected a 3.8 per cent year-on-year (yoy) contraction instead of a 0.2 per cent yoy growth previously.
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“Compounding the expected demand contraction is our expectation of a weaker Ringgit against US Dollar at the average of RM4.22 this year, revised from RM4.18 previously, against last year’s average of, which will inflate the original equipment manufacturers’ (OEMs) cost base to a certain extent this year. – Bernama
“We estimate around 9.0 to 20 per cent, depending on localisation rate of an OEM’s blended cost base to consist of imported components, which is exposed to forex fluctuation, mainly in US Dollar and Japanese Yen,” it said.Stay up-to-date by following Daily Express’s Telegram channel.
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