MAA projects total TIV to decline slightly to 790,000 units in 2026, down 3.7% y-o-y.
PETALING JAYA: Analysts are bracing for a moderation in the car sales momentum in 2026 amid a high base and intensifying competition, after Malaysia’s total industry volume (TIV) hit a fresh record in 2025, defying expectations that sales would peak a year earlier.
According to the Malaysian Automotive Association (MAA), December 2025 TIV came in at 90,716 units, lifting full-year volumes 0.2% year-on-year (y-o-y) to a new high of 820,752 units.
This surpassed the previous record of 818,711 units set in 2024.
RHB Research said the stronger-than-expected performance was mainly driven by non-national marques, particularly Chinese brands.
Chery recorded a 70% y-o-y increase in sales, followed by BYD at 77% y-o-y, while Honda saw a 12% decline and Toyota posted flat sales.
On the domestic marques, Perodua delivered 359,900 vehicles in 2025, marking its fourth consecutive year of record-high sales, while Proton recorded a 3% y-o-y increase in volume.
As a result, national marques expanded their market share to 62.3% from 61.8% in 2024, with Perodua maintaining its position as market leader with a 44% share.
RHB Research expected sales momentum to ease after four consecutive years of growth.
“We expect TIV to tone down slightly by 2% to 805,000, coming from a high base and softening of car replacement cycle although macroeconomic conditions are still supportive of car purchases,” it noted.
TA Research also expected a slowdown, projecting a sharper contraction in industry volumes.
It forecast 2026 TIV at 750,000 units, or an 8.6% y-o-y decline, citing intensifying price competition and margin pressure, particularly among non-national brands.
Meanwhile, MAA projects total TIV to decline slightly to 790,000 units in 2026, down 3.7% y-o-y.
MAA expects passenger vehicle sales to fall 3.8% y-o-y to 730,000 units, while commercial vehicle sales are forecast to ease 2.7% y-o-y to 60,000 units.
Electric vehicle (EV) adoption continued to accelerate in 2025, although figures varied depending on data sources.
RHB Research said MAA data showed EV sales rose 109% y-o-y to about 30,800 units, accounting for 3.8% of total TIV.
In contrast, Road Transport Department data, which includes non-MAA members, showed EV registrations doubling to 44,800 units, or 5.1% of total vehicles registered during the year.
RHB Research noted that EV sales in 2026 are expected to skew towards locally assembled models following the expiry of tax exemptions for fully imported EVs from Jan 1, 2026.
“We note that EV players have started planning for locally assembled production, such as Xpeng (commencing production at end-1Q26), BYD plant to be completed in 2026), and Proton’s e.MAS 7 introduction,” it said.
MAA categorises hybrid vehicles and EVs collectively as xEV.
It said, in 20205, xEV sales surged 52.2% y-o-y to 69,400 units, with hybrid vehicle sales rising 25% y-o-y to 38,500 units, while EVs more than doubled to 30,800 units.
xEVs accounted for about 8% of total TIV, up from 5.6% in 2024.
For 2026, MAA expects xEV sales to rise further to 100,000 units, comprising 51,000 hybrid vehicles and 49,000 battery electric vehicles.
On the broader market, RHB Research said macroeconomic conditions remained supportive, with the lower overnight policy rate easing borrowing costs and a stable labour market.
Unemployment stood at 2.9% in November 2025, the lowest since November 2014. The research house maintained its “neutral” rating on the automotive sector.
