THE Malaysian car market is always changing. This is due to a mix of factors, including what buyers want, economic conditions, and global trends.
In the past, people often stuck to certain brands and looked for affordable cars. Now, there’s a clear change. While good value for money is still most important, lifestyle choices, especially the growing popularity of sports utility vehicles (SUVs), are reshaping what people buy. This article looks at the changing heart of the Malaysian car buyer.
Consumer preferences in flux
Brand loyalty in the Malaysian car industry has seen big changes. National car brands once had a strong position, but their market share has been normalised, largely due to a wider range of options.
For those of you old enough to remember, the Proton Wira and Saga in the 1990s held a collective market share of more than 58%. The 2000s saw competition opening up, and this share dropped to a mere 12.5% by 2016.
In recent years too, the brand has again experienced declines, from a high of 27.1% in 2021, to just under 19% this year to date. It would seem that buyers are more open to foreign cars and are less influenced by national pride alone.
This recent decline happened as Chinese car makers grew strongly in the Asean region, including Malaysia.
Brand loyalty in Malaysia has evolved tremendously over the recent decades too. In the 1990s and 2000s, there were just a handful of non-national makes that commanded a strong following, which in turn propped up resale values.
Think Mercedes-Benz, Honda and Toyota back then; we were one of the few markets that thought about selling a car even before we bought it!
The watershed moment happened in the 2010s, when two major shifts happened. First, Volkswagen opened the present-day market to a more affordable, semi-premium European selection, giving buyers a credible non-Japanese alternative. Second, Proton via its Geely-based models gave Malaysia a taste of modern Chinese vehicles and thereby broke the boundaries of traditional brand loyalty.
Chinese cars were no longer cheap and cheerful. This period showed that Malaysians were willing to look beyond blind loyalty in favour of trying something new.
The arrival of electric vehicle (EV) brands further complicates the loyalty picture.
Aside from perceived environmental benefits, an important EV proposition is also that they require minimal maintenance and are less intimidating to those who are not mechanically inclined.
This curries favour with a larger audience base, who now have an easier pathway to day-to-day mobility without the greasy hassles of workshops and petrol pumps. In turn, this has driven a shift too in value-based loyalties, as more and more buyers are seemingly less concerned by resale values, where EVs are worse affected.
The quest for value: Why affordability trumps loyalty
At the lower end of the market, affordability continues to be a main reason for buying cars in Malaysia. Local leaders like Perodua and Proton consistently sell the most cars, together holding about 60% of the local market.
Perodua alone has 44%. Their models, like the Myvi and Saga, are always popular because they are affordable and useful for daily commutes and family needs.
This lasting popularity shows that for a large part of the Malaysian population, good value for money is not just a preference but a basic need.
This is especially true for lower-income groups and lower middle-income groups, who are expected to be protected from the first effects of the upcoming RON95 fuel subsidy changes. This makes the affordable-car segment stable.
At this end of the market, brand loyalty is seen as a nice-to-have. People buy budget cars not because they want to, but because they are limited by budget or spending power.
They aspire to bigger, better cars, and when they can do so, they build an affinity for a brand. That affinity stays with them, often over generations.
This is why loyalty must be looked at as a long-term game. It is built over generations, but can be so easily swayed too.
It is also why established car brands invest heavily in building a total ecosystem, where the ownership experience, maintenance and reliability, delightful driving experiences, and resale value are all carefully attended to. These brands also develop and offer a range of models to cater across the ownership lifecycle.
The rise of the SUV: Lifestyle aspirations driving segment’s dominance
Another strong shift in recent years has also been towards the modern SUV segment.
With its rising popularity in the 1990s, traditional car brands which had commanded a strong loyalty following realised that without a line-up of SUVs, they would lose their customers.
The rise in SUV popularity is due to a mix of reasons. Buyers want more space and usefulness for daily commutes, shopping and family trips, which SUVs provide with plenty of room for people and cargo.
Beyond just being useful, the strong look of SUVs appeals to a growing desire for individuality and style.
This suggests that SUVs are not just practical vehicles but also symbols of lifestyle, imagination, empowerment, and freedom for many buyers.
Also, improvements in SUV technology, like better handling, fuel efficiency and the use of hybrid and electric motors, have made them more appealing for different types of roads.
This growing preference for SUVs gives car makers a clear direction, leading to more investment in all SUV types, from small entry-level models to luxurious larger ones.
Proton’s smart choice to launch its first EV, the e.MAS 7, as an SUV, which has already received over 4,000 orders, shows how well this fits the market.
This proves that even in the new EV market, the SUV type of vehicle is seen as key to getting buyers interested and driving sales.
The strong buyer demand for SUVs directly affects how car makers develop new products and enter the market, making competition tougher in this segment.
In many ways, the SUV disruption is similar to what’s happening with EVs today.
A new segment disrupting the status quo, leading to car makers rethinking and re-strategising their businesses.
The real winners in this are the consumers, who get ever-improving standards of mobility and freedom of choice. The brands that understand this are the ones that win.
The views expressed here are the writer’s own.
