PETALING JAYA: Malaysia’s automotive sector is expected to end this year with a total industry volume (TIV) of around 700,000 units, reflecting a decline from the 816,747 units recorded last year.
Analysts attributed the anticipated slowdown to evolving market conditions and policy changes influencing consumer purchasing behaviour.
According to the latest data from the Malaysian Automotive Association (MAA), 63,906 vehicles were sold in February, marking a significant 30% month-on-month (m-o-m) increase from 48,732 units in January.
However, on a year-on-year (y-o-y) basis, the figure represents a slight decline of 1.7% compared with February 2024.
TA Research attributed the strong m-o-m rebound to market stabilisation following January’s slowdown, which affected vehicle registrations and production schedules.
Production figures for February totalled 61,545 units, with passenger vehicles accounting for 58,606 units and commercial vehicles 2,939 units.
Local carmakers Perodua and Proton continued to see strong demand, recording 28.9% growth in sales.
Notably, Proton’s latest electric vehicle (EV), the e.MAS 7, has emerged as a market leader in the EV segment.
Since its launch last December, the model has received over 4,500 bookings, with 580 units delivered in February, making it the best-selling EV for the month.
Among non-national marques, Honda recorded the highest m-o-m growth at 105.2%, selling approximately 7,000 units.
Toyota and Volkswagen also posted positive sales performances, increasing by 21.3% and 16.5% to 4,800 units and 120 units, respectively.
However, Nissan and Mazda struggled, with sales dipping to 446 and 623 units, respectively.
TA Research said, looking ahead, higher sales are expected for this month, considering that automotive companies are striving to finalise deliveries ahead of Hari Raya as well as the historically strong sales numbers in March.
The research house maintained a “neutral” recommendation on the automotive sector and said it was holding its TIV forecast for this year at 700,000 units.
Sharing the same view, MIDF Research said it expects the TIV this month will improve on a m-o-m basis supported by promotional activities leading up to the Hari Raya holidays.
Beyond the immediate outlook, policy changes will likely influence consumer purchasing decisions in the coming months.
The phasing out of fuel subsidies for the top 15% income group is expected to prompt some consumers to trade down or switch to EVs before the current tax exemptions for completely built up EVs expire at the end of the year.
Additionally, the automotive sector has secured a final extension for the revised excise tax, which would have broadened duties on completely knocked down (CKD) vehicles.
The policy is now set to take effect next January, with prices for CKD vehicle anticipated to rise by 10% to 30%.
MIDF Research maintained a “neutral” call on the sector given the anticipated downcycle.
“Our projected 3% decline y-o-y in TIV is broadly in line with MAA’s forecast of a slowdown by 4.5% y-o-y,” it said.
