KUALA LUMPUR (July 18): Malaysia's June 2018 automotive total industry volume (TIV) could have reached a record high, boosted by the country's zero-rated goods and services tax (GST), MIDF Amanah Investment Bank Bhd said.

In a note today, MIDF said consumers held back purchases to take advantage of the GST-free and sales and services tax-free period from June 1 till mid-September 2018.

"June TIV, expected to be released this week, could test record highs being the maiden month of the tax-free period up till mid-Sept 2018. For June, we expect key players such as UMW Toyota to stage a strong rebound, given pent up demand (as consumers waited for 1st June to put in bookings) and as consumers also brought forward purchases into the 3.5 months of tax holiday period. 

"We would not rule out Toyota TIV rising more than 5 times sequentially and more than doubling on a year-on-year basis. Our channel checks suggests that Mazda’s waiting list exceeds 5 months (some of these might be cancelled if delivery is after mid-Sept 2018, we think), while some distributors have already suspended bookings for selective high volume models," MIDF said.

According to MIDF's note, Malaysia's May TIV stood at 42,983 vehicles, which brought the year-to-date figure to 225,212.

MIDF, which maintained its “positive” recommendation on the automotive sector, said Bermaz Auto Bhd remains its top sector pick. Bermaz distributes Mazda cars in Malaysia.

MIDF said it has a “Buy” call for Bermaz shares, with a target price of RM2.70. At Bursa Malaysia, Bermaz shares rose one sen to RM2.26 at 11:06am, with 220,400 units traded.