Malaysia’s automotive market, after three years of unprecedented growth, is set to decelerate in 2026 as demand stabilises, policy support diminishes, and competition intensifies across both the electric and conventional vehicle segments.
Industry data reveals a 4.6% month-on-month decline in November sales to 72,509 units, following October’s peak of 75,992 vehicles. Year-to-date deliveries totalled 727,836 units, 1.15% lower than the same period last year. For perspective, 2024 sales reached a record high of 816,747 units.
Analysts anticipate a gradual return to a more sustainable demand environment, with a notable adjustment expected heading into 2026.
A key factor shaping 2026 is the expiry of tax exemptions for fully imported (CBU) electric vehicles (EVs) at the end of 2025. CBU EVs are now subject to import and excise duties. Estimates suggest that prices for CBU EV models could rise by 20% to 40%.
Xpeng plans to start EV assembly in Malaysia in 2026, while national brands Proton and Perodua are expanding CKD production as part of their broader localisation strategies. BYD is building a CKD facility in Tanjung Malim, with operations slated to begin in 2026, while Leapmotor, through its partnership with Stellantis, is planning CKD production at its Gurun facility. Chery and Great Wall Motor are expanding or preparing CKD plans as part of their wider Asean strategies.
Beyond EV-specific policies, the broader automotive market will also be shaped by structural changes beginning in 2026. A revised open market value (OMV) excise duty framework for CKDs – originally slated for January 2026 but recently pushed to July 1, 2026 – could push vehicle prices higher by 10% to 30%, depending on model specifications and localisation levels, according to industry players. TIV is projected to moderate further in 2026 to around 750,000 units.
The continuation of the RON95 petrol subsidy under initiatives such as Budi95 is expected to support demand for internal combustion engine (ICE) vehicles, particularly in the mass-market segment, dampening the incentive for some consumers to switch to EVs in the near term.
Malaysia’s long-term target is for EVs and hybrids to account for 20% of new car sales by 2030, 50% by 2040 and 80% by 2050. Currently, BEVs (battery electric vehicles) make up about 5% of total industry volume.
Usually, car sales is a barometer of economic growth. Caution in 2026 suggests consumers are likely to hold back consumption because of uncertainties in the local and global scenes. And that’s not good for GDP growth!
Reference:
Auto market
switching to slow lane, Kirennesh
Nair, Star Biz7, The Star, 5 January 2026
No comments:
Post a Comment