Malaysian New Vehicle Sales Expected to Decline in 2025

Automotive News

Malaysian New Vehicle Sales Expected to Decline in 2025
New Vehicle SalesCIMB SecuritiesTIV
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CIMB Securities predicts a 7% decline in new vehicle sales in Malaysia, reaching 760,000 units in 2025 due to potential headwinds like the removal of the RON95 petrol subsidy. However, the sub-RM100,000 segment is expected to remain resilient, driven by first-time buyers and government policies. National brands are predicted to maintain dominance in this segment.

CIMB Securities Sdn Bhd predicts a 7% year-on-year decline in the total industry volume ( TIV ) for new vehicle sales in Malaysia, reaching 760,000 units in 2025 compared to 816,674 units in 2024. This downward forecast stems primarily from potential headwinds such as the possible removal of the RON95 petrol subsidy in mid-2025.

However, the research firm anticipates resilient demand within the sub-RM100,000 segment, which is heavily influenced by national brands and select entry-level models from Japanese manufacturers. CIMB Securities estimates that sub-RM100,000 vehicles accounted for at least 75% of Malaysian TIV in 2024, with national brands controlling over 80% of this segment. Japanese and Chinese marques combined for the remaining 20%. The firm expects this demand trend to persevere in 2025, fueled by first-time car buyers, a projected December 2024 salary increase for civil servants, and a supportive interest rate environment maintained by Bank Negara Malaysia.The stable overnight policy rate (OPR) and the government's intention to retain fuel subsidies for 85% of RON95 users, as outlined in Budget 2025, are expected to bolster affordability for the mass-market segment. As a result, CIMB Securities anticipates national brands to retain their dominance, capturing an estimated 64.5% market share compared to 35.5% for non-national brands in 2025. Despite this, CIMB Securities maintains a 'neutral' rating on the local automotive sector due to a muted growth outlook amidst intensifying competition from Chinese players. Key catalysts for the sector include a strengthening of the ringgit against the US dollar and Japanese yen, a decline in interest rates, and favorable government policies aimed at stimulating domestic demand. The firm highlights Sime Darby as its top sector pick, citing its earnings-accretive acquisition of UMW Holdings, growing exposure to Australia's mining sector, and potential monetization of non-core and land bank assets.

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New Vehicle Sales CIMB Securities TIV RON95 Subsidy Malaysian Automotive Sector National Brands Sub-RM100 000 Segment

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