RHB Research expects TIV to soften to 730,000 units in 2025.
PETALING JAYA: Malaysia’s new vehicle sales, commonly known as total industry volume (TIV), are expected to soften in 2025 after hitting another record high last year, with the growth of electric vehicle (EV) sales unlikely to significantly move the needle.
In 2024, the TIV reached a record high of 816,747 units, surpassing the previous record of 799,821 units achieved in 2023, driven by strong production volumes and robust demand.
Forecasts for 2025, however, suggest a moderation in sales, with RHB Research expecting TIV to soften to 730,000 units in 2025, a decline of 11% year-on-year, “given the lack of catalysts to drive sales to another high”.
“We do not see any compelling factors for 2025 auto sales to be maintained at the current elevated levels,” it noted.
The research firm cited the high-base effect, ongoing price competition in the non-national segment and softening order backlogs as reasons for its cautious outlook, maintaining a “neutral” stance on the sector.
Additionally, it said uncertainties surrounding the implementation of a luxury tax and petrol subsidy rationalisation could weigh on demand.
While RHB Research remains cautious, Kenanga Research offered a more optimistic view.
It maintained its 2025 TIV forecast at 805,000 units, a modest decline of 1% year-on-year.
“Our 2025 TIV forecast will be driven by forward buying interest on the deferment of new excise duty regulations,” it said.
Notably, last week, the Malaysian Automotive Association or MAA confirmed that the revision to the open market value excise duty has been deferred to 2026 from its initial 2025 implementation.
This delay prevents a potential 10% to 30% price increase for completely knocked-down or CKD locally assembled cars.
Looking ahead, Kenanga Research highlighted the persistence of a two-speed market, where the affordable segment is expected to remain resilient, buoyed by potential benefits from the progressive wage model and limited exposure to petrol subsidy rationalisation.In contrast, the premium segment may see slower sales as buyers adjust to higher costs.
On the EV front, both RHB Research and Kenanga Research highlighted growth potential but agreed that the segment remains small.
RHB Research noted that while EV sales are expected to rise ahead of the expiration of tax exemptions for completely-built-up (CBU) EVs at the end of 2025, the increase “will not meaningfully move the TIV needle”.
Kenanga Research pointed to strong growth in EV registrations, which surged to 21,789 units in 2024, representing 3% of TIV, but emphasised the need for government incentives and charging infrastructure to sustain this momentum.
Maybank Investment Bank Research pointed to the structural transition in the automotive industry, driven by the rise of EV players.
“The automotive industry is transitioning, driven by the rise of EV players, with current investments focused on downstream areas like showrooms and service centres, alongside growing interest in EV assembly,” it said.
It noted that the expiration of CBU EV incentives could encourage local sourcing and create opportunities in the EV supply chain.
However, it warned that traditional automakers face pressure from Chinese EV brands and the capital demands of EV transitions, “spurring global consolidation that could impact local players”.
“Local auto parts players can capitalise on the EV transition through technical partnerships and upskilling to expand their customer base and access global supply chains, while traditional auto parts suppliers risk losing out,” it noted.
