Car sales to pick up speed again this year
Despite starting at a slower pace, the sales of new vehicles are expected to rebound in the coming months, driven by wage and salary increases, analysts say.
Total industry volume (TIV) fell 40.2% month-on-month (m-o-m) to 48,875 units in January, from 81,735 units last December, as sales declined across both national and non-national brands.
The drop was largely anticipated following strong year-end promotions in December and fewer working days in January due to multiple public holidays, BIMB Research said in a report.
Despite the slow start, BIMB Research has maintained its TIV forecast for this year at 810,000 units, just 1% lower than the record 816,747 units achieved last year.
The research house said it expects demand to recover, driven by higher disposable income from salary adjustments for civil servants and the higher national minimum wage.
Last August, Prime Minister Datuk Seri Anwar Ibrahim announced a phased pay rise of up to 15% for civil servants, with the first increase on Dec 1, 2024, and the second on Jan 1, 2026.
Additionally, the national minimum wage was increased from RM1,500 to RM1,700, effective Feb 1, 2025.
“Historical trends indicate that salary hikes have boosted TIV growth by enhancing disposable income and vehicle affordability. Examples of this are the 7% year-on-year increase in 2008 and 5% in 2012, ” the research house said.
“While the initial weakness in January is not unusual due to the end of year-end promotions, we anticipate a rebound in subsequent months, particularly from the B40 and M40 segments, sustaining demand through this year and extending growth into next year.”
In line with this, BIMB Research maintained an “overweight” call on the automotive sector, citing “resilient domestic demand”.
“We foresee potential upside risk to TIV if the open market value (OMV) duty is implemented on Jan 1, 2026, as pre-emptive buying ahead of the new tax structure could bring forward demand into the fourth quarter of this year, temporarily boosting sales before the implementation,” it added.
In January, national car sales fell 23.4% year-on-year (y-o-y) to 32,512 units, with a 28.8% month-on-month (m-o-m) decline.
The drop was due to weaker demand for key models.
Perodua saw sales fall 27.8% m-o-m to 23,245 units, mainly from slower demand for the Bezza and Myvi, while the Axia remained stable.
Proton recorded a 31.3% m-o-m drop to 9,267 units, with lower sales of the X70, X50 and Iriz.
Despite this, Proton’s first national electric vehicle (EV), the e.MAS7, became the best-selling EV model in January with 421 units sold.
Overall, national brands held a 67% market share, with Perodua at 48% and Proton at 19%.
Meanwhile, non-national car sales plunged 54.6% m-o-m to 16,363 units, reducing market share to 33% from 44% in December.
The sharp decline was mainly due to weaker sales of commercial vehicles, which fell 59.3% m-o-m.
Among key brands, Honda dropped 63.9% m-o-m to 3,413 units, Toyota fell 57.9% m-o-m to 5,335 units, while Chery and Mazda also posted double-digit declines. EV sales, similarly, fell 34% m-o-m to 1,691 units.
Proton’s e.MAS7 led EV sales, while BYD remained the top EV brand despite a 61% m-o-m decline to 505 units.
Tesla sales plunged 96% m-o-m to just 13 units, while BMW remained stable at 230 units.
“Despite the slowdown, EV penetration increased slightly to 3.1% of total vehicle registrations from 2.5% in Dec 2024, though it remains significantly below the government’s 20% target by 2030,” BIMB Research said.
On the charging infrastructure front, the research house said Malaysia currently has 3,611 public charging points, with 2,516 alternating current (AC) units and 1,095 direct current (DC) units).
To meet the 10,000-unit target by the end of this year, BIMB Research said an average of 639 chargers (599 AC, 40 DC) must be installed monthly.
“The government has revised its allocation for 1,500 DC and 8,500 AC chargers, with the DC target on track, while AC deployment may face delays,” it added.
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