BIMB Securities Research said the sector’s near-term outlook remains balanced.
PETALING JAYA: Malaysia’s automotive sector continues to show resilience, with underlying demand holding firm and recent policy developments providing a short-term boost.
Despite a monthly pickup in total industry volume (TIV), caution is advised amid external and competitive headwinds.
According to BIMB Securities Research, the sector’s near-term outlook remains balanced.
Reiterating its “neutral” call, the research house explained that its view on the automotive sector is supported by resilient underlying demand and favourable income policies.
In a note, BIMB Securities Research highlighted expectations of new open market value duties potentially kicking in by 2026, which could act as a catalyst for early purchases and boost sales in the fourth quarter of 2025.
TIV for May 2025 rose 12% month-on-month (m-o-m) to 68,007 units, driven by stronger passenger and commercial vehicle sales.
Passenger vehicles climbed 12.1% m-o-m to 55,971 units, while commercial units increased by 15.2% to 5,250 units.
However, year-to-date figures told a more muted story – sales slipped 5% to 316,737 units compared with the same period in 2024.
BIMB Securities Research cautioned that several risks could dampen sentiment going forward.
“Key downside risks include global supply chain disruptions, softer consumer sentiment amid rising living costs, and competitive pressures from intensifying rivalry with Chinese original equipment manufacturers and the ongoing China electric vehicle (EV) price war,” it noted.
Still, the research house believes current market jitters are not necessarily reflective of sector fundamentals.
“Although fundamentals remain robust, recent sell-offs appear largely sentiment-driven,” it noted.
In terms of stock picks, BIMB Securities Research is reviewing its calls but has retained a “neutral” stance on several key players.
“While our stock calls are currently under review, we maintain a ‘hold’ call on Sime Darby Bhd
, MBM Resources Bhd and Bermaz Auto Bhd (BAuto),” the research house said.
Its target price for Sime Darby stands at RM2.10, while that for MBM is at RM5.50 and 86 sen for BAuto.
Statistics showed that national brands continued to dominate in May, with sales rising 11.7% m-o-m to 44,149 units.
Perodua led with a 14.7% m-o-m gain, driven by strong demand for the Bezza and Myvi, while Proton saw a 4.9% uptick.
Non-national marques also improved, up 13.6% m-o-m to 23,858 units. Toyota and Honda led the charge, but Mazda saw a 14% drop.
EV momentum is gaining traction, though adoption remains well below national targets.
“Malaysia’s EV registrations rose 44% m-o-m to 4,152 units in May 2025,” BIMB Securities Research noted, citing Road Transport Department data.
Tesla’s new Model Y facelift boosted sales 10-fold to 1,075 units, while BYD remained the top performer with 1,148 units.
That said, with EV penetration at just 4.1%, the road to 20% by 2030 remains long, BIMB Securities Research noted.
