PETALING JAYA: Analysts expect total industry volume (TIV) to decline next year, owing partly to the potential subsidy removal and open market value (OMV) revisions.
CIMB Securities said it expects total new vehicle sales to decline by 4% to 755,000 units in 2025 as a result, although these could accelerate battery electric vehicle (BEV) adoption.
“National brands, led by Perusahaan Otomobil Kedua Sdn Bhd or Perodua, are expected to retain their dominant market share. Sector net profit is projected to resume a 3% growth in 2025, driven by higher earnings contributions from Sime Darby.
“We are downgrading the sector from ‘overweight’ to ‘neutral’, owing to a subdued growth outlook amid intensifying market competition,” the research house said.
The Malaysian Automotive Association (MAA) previously estimated that revising the OMV calculation could raise the average selling prices of locally assembled vehicles by 8% to 20%. However, implementation has been deferred multiple times, with the latest extension until Dec 31, 2024.
Despite these challenges, the brokerage said removing the RON95 subsidy could accelerate the adoption of BEVs, noting that Sime Darby is well-positioned to benefit, with its expanding electric vehicle (EV) portfolio across marques like BMW, MINI, Porsche, BYD and Volvo.
“We also anticipate higher BEV adoption in 2025, driven by new model launches, new entrants and rising competition among EV players ahead of the duty exemptions for imported models ending in 2026, after which domestic assembly will take precedence,” it said.
Nonetheless, the research house said demand for national brands like Proton and Perodua are expected to remain robust, supported by first-time buyers and the mass-market segment.
The government plans to retain subsidies for 85% of RON95 users under Budget 2025, sustaining the affordability of national vehicles.
As a result, CIMB Securities expects national brands to maintain their dominance, capturing a 65% market share versus 35% for non-national brands in 2025.
Maybank Investment Bank Research remains cautiously optimistic on the domestic TIV outlook for 2025, introducing a forecast of 750,000 units.
While this represents a moderation in year-on-year (y-o-y) growth (from about 800,000 units expected in 2024), it remains significantly above the pre-Covid 19-pandemic average of 600,000 to 650,000 units.
“We expect the sustained strength to be driven primarily by local original equipment manufacturers (OEMs) in the mass-market segment (vehicles priced below RM100,000), supported by robust order backlogs for certain OEMs, availability of value-for-money models and improved consumer spending power from the civil service wage hike in December 2024 and minimum wage hike in February 2025.
“However, growth may be constrained by production limitations, as key OEMs with remaining backlogs (such as Perodua, Proton and Toyota) are already operating at full capacity,” it noted.
