PETALING JAYA: The contraction in total industry volume (TIV) sales for September was expected with analysts expecting fourth quarter of financial year 2026 (4Q26) TIV to remain strong, supported by strong demand, promotional campaigns and new model introductions.
TIV in September stood at 69,609 units, down 4.2% on a month-on-month basis as sales of national marques Perodua and Proton declined by 5% and 10%, respectively, with analysts attributing this to prospective buyers adopting a wait-and-see approach ahead of the national Budget 2027 announcement.
On a year-on-year (y-o-y) basis, Malaysian Automotive Association (MAA) data noted September sales expanded by 18.9%.
For the nine months of the year (9M26), TIV rose by 4% y-o-y to 602,633 units, supported by Proton (e.MAS, Saga and facelift launches), Mazda (robust Mazda 3 sales) and Jetour sales.
“We believe that promotional campaigns and new model introductions have supported year-to-date TIV growth,” CGS International (CGSI) Research noted in a sector report.
The electrified vehicle (xEV) segment – encompassing battery electric vehicles (BEVs) and hybrids – continued to serve as a pivotal growth driver for the broader market
In 3Q26, xEVs achieved a record quarterly market share of 14.8% of total TIV, with BEVs accounting for 7.7% and hybrids making up 7.1%.
For the 9M26, xEV sales surged 76% y-o-y to reach 84,058 units, accounting for 8.9% of market share of TIV.
Segment growth was further reinforced by new market entrants, such as Zeekr joining the MAA with average monthly sales of about 450 units, alongside sustained contributions from brands including BYD, Jetour, and Mazda.
CGSI Research has retained its full-year TIV forecast at 780,000 units or down 5% y-o-y but CIMB Securities raised its full-year TIV forecast by 2.2% to 815,000 units (exceeding MAA’s 800,000 projection), anticipating a stronger 4Q26 driven by year-end promotional campaigns, fuel subsidies, and robust xEV demand.
“Meanwhile, xEV sales surged 76% y-o-y to 84,058 units in 9M26, and we expect this momentum to persist into 4Q26, alongside higher production volumes from national marques.
“The continuation of petrol and diesel subsidies under Budget 2027 should help preserve household purchasing power, particularly among mass-market consumers,” the research house stated.
It added income tax savings and the proposed minimum wage increase effective June 2027 could provide further support for demand over the medium term, benefitting national marques such as Perodua and Proton.
However, it retained a ‘neutral’ rating on the sector due to tepid long-term volume growth and market competition.
CGSI Research maintained an ‘overweight’ stance on the auto sector with top picks including Sime Darby Bhd
with an ‘add’ rating and a target price (TP) of RM2.80 share, which is trading at an undemanding 9.7 times 2027 price-to-earnings multiple and offers a 6% 2027 dividend yield.
“We expect post-war reconstruction and the rebuilding of industrial capacity, both within and outside the Middle East, to boost commodity demand and, in turn, increase demand for its mining equipment in Australasia (Sime Darby’s Australasia industrial segment contributed about 36% of the division’s financial year 2026 (FY26) profit before interest and tax) over FY27 to FY28,” the CGSI Research stated.
It remains cautiously optimistic on Sime’s China auto business, expecting a gradual recovery in FY27, supported by BMW China rebates and the newly-launched BMW Neue Klasse.
CIMB Research has a “hold” rating on the stock with a TP of RM2.60 a share.
Bermaz Auto Bhd (BAuto) is another stock liked by both brokerages who have a “buy/add” recommendation.
CGSI Research has a TP of RM1.37 on the stock while CIMB Research has a TP of RM1.25.
BAuto is supported by robust Mazda 3 volume growth, an expected FY27 earnings recovery following the launch of the new Mazda CX-5, and a solid net cash position.
CGSI Research also has an “add” call on Hong Leong Industries Bhd with a TP of RM26.30 a share.
