Malaysian Automotive Sales Forecast to Decline in 2025
KUALA LUMPUR: Malaysia’s automotive sector is projected to see a dip in sales in 2025, with total industry volume (TIV) expected to return to more normalized levels after a strong post-pandemic rebound.
According to Hong Leong Investment Bank Bhd (HLIB), TIV is forecast to drop by 8.2% year-on-year to 750,000 units in 2025, compared to the Malaysian Automotive Association’s (MAA) projection of 780,000 units.
“Our top stock picks in the sector are MBM Resources (Buy, target price: RM7.40) and Sime Darby (Buy, TP: RM2.65), driven by their strong leverage on Perodua’s more sustainable sales volume,” HLIB noted in a research report.
The investment bank also highlighted that the entry of several new electric vehicle (EV) players into the market is intensifying competition, particularly affecting original equipment manufacturers (OEMs) due to the attractive pricing strategies of these newcomers.
Despite the projected decline, HLIB pointed to potential upside from several key factors, including the launch of appealing new models in late 2024 and 2025, as well as more aggressive sales and marketing strategies by OEMs to maintain their market share. The bank has maintained a “neutral” rating on the sector.
Meanwhile, Kenanga Investment Bank Bhd offered a more optimistic outlook, estimating 2025 TIV at 805,000 units—a modest year-on-year decline of just 1%. The firm attributes this to forward-buying momentum spurred by the postponement of new excise duty regulations until the end of 2025.
“Perodua stands to benefit the most, commanding an estimated 44% share of the TIV. This is supported by its high localization rate, which could cushion the impact of cost increases when local vehicle prices rise between 10% to 30%. The launch of new models, including Perodua’s hybrid, EV, and the latest Myvi, will further bolster sales,” Kenanga noted.
Kenanga also observed that the automotive market will remain divided in 2025, with certain segments continuing to face headwinds while others maintain growth.
“Business will largely remain unaffected in the affordable vehicle segment, which caters to lower-income groups such as the B40 and lower M40. These consumers are less likely to feel the impact of the upcoming RON95 fuel subsidy rationalization and may benefit from the potential rollout of a progressive wage model,” it added.
-Agency
