Wednesday, December 28, 2011

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.

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