PETALING JAYA: The rise in fuel and logistics costs feed into inflationary pressures across the economy, eroding purchasing power, which could dampen demand for big-ticket items such as vehicles as consumers become more cautious in their spending.
“For commercial vehicles, operators that are not fully covered by fuel subsidies are likely to face a sharp increase in operating costs, particularly from higher diesel prices,” MBSB Research noted in a recent report.
This could lead to more cautious capital allocation, with companies scaling back or delaying fleet expansion and focusing instead on cost control and operational efficiency.
The research house said the situation could also accelerate a shift towards more fuel-efficient internal combustion engine vehicles, hybrids and, for higher-mileage users, electric vehicles (EVs).
“We maintain our full-year total industry volume (TIV) forecast at 788,000 units – implying a minus 4% year-on-year (y-o-y) decline from 821,000 units in the prior year – following four consecutive years of growth,” it said.
This is broadly in line with the Malaysian Automotive Association’s (MAA) projection of a 3.8% y-o-y contraction to 790,000 units.
“Our top sector pick remains MBM Resources Bhd
– ‘buy’ call maintained with a target price of RM6 a share – underpinned by its exposure to Perusahaan Otomobil Kedua Sdn Bhd (Perodua), which continues to demonstrate resilience within the mass market segment.
“In addition, favourable Japanese yen/ringgit movements support its associate contributions, which make up over 70% of profit before tax,” MBSB Research said.
The February TIV came in at 52,414 units, down 18.5% month-on-month, mainly due to fewer working days and a one-week plant shutdown during the Chinese New Year period.
Despite this, the year-to-date TIV for the second month of 2026 grew marginally by 0.8% y-o-y to 116,712 units, supported by strong January sales driven by spillover demand from new model launches at the end of last year.
While official March TIV data from MAA will only be released in the next one to two weeks, MBSB Research has reviewed new car registration data from the Road Transport Department to gauge the 2026 first quarter performance.
It said Perodua registered 24,530 units in March 2026, bringing its year-to-date total to 74,233 units.
Moreover, Proton Holdings Bhd recorded 15,243 units for the month, lifting its year-to-date tally to 48,440 units or 24% of its 200,000 full-year target.
Meanwhile, March registrations for Honda Malaysia Sdn Bhd and UMW Toyota Motor Sdn Bhd (including reconditioned units) came in at 7,062 units and 8,617 units respectively.
“Proton remained the leading brand in the passenger EV segment during the first quarter, recording total sales of 8,197 units,” MBSB Research said.
Of this, 82% was driven by the e.MAS 5, which was launched in October 2025.
The research house added that the e.MAS 7 saw renewed momentum in March 2026, with registrations rising to 952 units from the 200 to 300 range earlier in the year, following its transition to local assembly that reduced prices by RM4,000 to RM6,000.
It noted that the Finance Ministry had reduced the quota to 200 litres per month effective April 1, 2026 for petrol users eligible for Budi95, and the impact is likely minimal.
In contrast, non-subsidised petrol users as well as those exceeding the quota, would face a sharp rise in fuel costs.
