PETALING JAYA: RHB Research has maintained a “neutral” stance on the country’s automotive sector despite raising its total industry volume forecast for 2026, citing policy uncertainty, inflationary pressures and a softening vehicle replacement cycle.
The research house increased its 2026 TIV forecast by 3% to 805,000 units from 780,000 units, after first-half sales came in stronger than expected.
It now expects full-year vehicle sales to range between 806,000 and 844,000 units, broadly flat to up 3% year-on-year (y-o-y) based on historical seasonal trends.
The revision follows a steady June performance, with the Malaysian Automotive Association reporting total industry volume of 67,879 units, up 10% month-on-month and 23% y-o-y.
Total production volume rose 20% from May, as the higher number of working days lifted output.
In its report, the research firm stated it expects vehicle sales to strengthen further in the second half of the year.
This is to be supported by new model launches, year-end promotional campaigns and a stable overnight policy rate or OPR.
Upcoming launches include the Proton e.MAS 7 Premium Plus EV, BYD Atto 3 and the Mazda CX-5.
Electric vehicle (EV) registrations also continued to gather pace.
It said based on Road Transport Department data, Proton remained the top-selling EV brand in June with 1,888 registrations, followed by BYD and Tesla.
Total EV registrations rose 23% from May to 6,215 units.
This accounted for 7.8% of total vehicle registrations in the first half.
According to RHB Research, the stronger EV demand was likely driven by consumers bringing forward purchases ahead of the implementation of Malaysia’s new EV policy on July 1.
The research house continues to favour Sime Darby Bhd
as its top sector pick, supported by the group’s diversified exposure across automotive distribution and other businesses.
Another analyst with a local brokerage said Sime Darby stood to benefit from the continued shift towards EVs and mass-market vehicles.
The analyst also viewed the stock’s valuation as attractive.
The analyst noted that it was trading at about 8.7 times forecast 2027 earnings, below its historical average valuation.
In addition, the stock is expected to offer a dividend yield of 6.8% in 2027.
The analyst also remains positive on Sime Darby’s industrial business.
