PETALING JAYA: Even as vehicle sales are expected to fall this year, automotive players in Malaysia also face price competition from China brands that will weigh on margins, analysts say.
BIMB Research, which is “neutral” on the automotive sector, said in a note that tighter financing and affordability challenges will also hit margins.
That said, near-term sales will be supported by new launches and the rollout of new electric vehicles (EV), the research house said.
“The upside includes stronger EV adoption and possible delays in open market value (OMV) excise reforms, which may extend demand momentum despite rising headwinds,” BIMB Research said.
MBSB Research, meanwhile, noted that the shift to an OMV-based excise duty for completely knocked-down vehicles – scheduled for January 2026 – may result in “a degree of early buying” in the second half of this year (2H25).
“Passenger vehicle total industry volume (TIV) should see some support from new model launches in 2H25, while the recent overnight policy rate reduction may help improve buying sentiment.
“Sales momentum is likely to remain strong this month, underpinned by improved stock levels and Merdeka promotions,” MBSB Research said.
In July, the TIV rebounded strongly as it rose 27.8% month-on-month (m-o-m) to 70,057 units.
The increase in sales was underpinned by broad-based gains across national (41.6% m-o-m) and non-national marques (7% m-o-m).
The July sales improvement was driven by a sharp rebound in passenger vehicle sales (29.4% m-o-m to 64,438 units), while commercial vehicle volumes rose at a slower pace (11.8% m-o-m to 5,619 units).
As for EVs, total registrations in July fell 15% m-o-m to 2,792 units, marking a declines across all major automotive players.
BYD retained market leadership with 870 units, followed by Proton’s e.MAS-7 (686 units) and Tesla (256 units). Despite softer volumes, EV penetration improved to 4.2% from June’s 3.9%.
On a year-to-date basis, total auto sales in Malaysia declined 4.7% year-on-year (y-o-y) to 443,777 units, underscoring a broader softening in demand.
MBSB Research said the TIV of 443,777 in the January to July period represents 56% of its full-year projection, which is in line with expectations.
“Overall, TIV is expected to ease this year on the back of a strong base.
“Our forecast for this year remains at 792,000 units (down 3% y-o-y), which is largely in line with the Malaysian Automotive Association’s estimate of 780,000 units (down 4.5% y-o-y).”
Among automotive companies, MBSB Research has a “buy” call on MBM Resources Bhd
, with a target price of RM5.36 a share.
On the other hand, BIMB Research has a “hold” call on MBM and a target price of RM4.30.
It also has a “hold” call on Sime Darby Bhd with a target price of RM1.75 and a “sell” call on Bermaz Auto Bhd with a target price of 65 sen.
