AmInvestment Bank expects demand in the automotive sector to increase this year once the salary hike adjustments for civil servants, announced by the government in May, is made. It said this is because 1.5 million civil servants will have higher purchasing power once the revisions are completed and will thus find it easier to receive bank approval for loans.
Taking that into account, the investment bank has revised the anticipated total industry volume (TIV) of 740,000 units for 2024 to 750,000 units, as Bernama reports. The financial institution added that national carmakers Proton and Perodua are expected to benefit most in terms of increased sales.
“A higher salary automatically means a better leverage ratio and we believe car loan financiers will happily approve new loan applicants. We are confident that Perodua and Proton will enjoy greater demand as they are the most popular brands among civil servants,” the investment bank said in a sector update report released yesterday.
Although the exact rate of the salary increase is not yet known, communications minister Fahmi Fadzil hinted earlier this month that civil servants’ salaries will be increased by 15% to 43$ by the end of 2024 under that revised Public Service remuneration system (SSPA).
Details of the salary adjustment mechanism, which will allow civil servants to check and calculate their salary hike, is set to be announced on August 16.
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