Malaysia's total industry volume (TIV) is projected to decline by two per cent year-on-year to 774,000 units in 2026, from 790,000 units in 2025, amid softer consumer sentiment and persistent inflationary pressures.
CIMB Securities said the outlook also reflects higher average selling prices for fully imported electric vehicles (EVs) following the expiry of the completely built-up EV tax exemption from January 2026.
Additional factors that could push excise duties higher include intensifying competition from Chinese automakers and a potential revision to the open market value (OMV) calculation, the research house said.
"Despite these challenges, we expect demand for national brands such as Proton and Perodua to remain resilient," it said in a note.
This is supported by steady demand from first-time buyers and the mass-market segment, as well as the continuation of the RON95 petrol subsidy under the Budi95 programme.
CIMB Securities expects Chinese brands to continue gaining market share in Malaysia, largely at the expense of Japanese marques, driven by aggressive pricing strategies to expand their foothold.
The research house said the six-month delay in revising the OMV calculation provides short-term relief for industry players, particularly automakers with greater exposure to locally assembled vehicles.
"We think this will benefit Japanese and European brands such as Toyota, Honda, Mazda, BMW and Mercedes-Benz," it said.
It also expects the national segment to command a larger share of battery electric vehicle (BEV) sales in 2026, following Proton's launch of the e.MAS 5 in November and Perodua's QV-E in December.
BEVs accounted for 4.1 per cent of total new vehicle sales in the first nine months of 2025, up from 2.4 per cent in 2024.
The research house maintained a "Neutral" rating on the sector, citing a subdued growth outlook amid intensifying competition.
Source: NST