Affordable Cars Dominate Market As Consumers Downtrade Amid Economic Pressures

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TOTAL industry volume (TIV) plunged 19% month-on-month (MoM) largely due to scheduled plant maintenance shutdowns during the Hari Raya Aidiladha holidays.
Meanwhile, TIV declined 6% year-on-year (YoY) mainly due to the shifting of new models launches toward the second half (2H) for this year by Perodua and other Japanese marques. 
“Looking ahead, we believe July 2025 TIV will be much higher than June 2025 TIV with full production month and attractive mid-year sales bonanza,” said Kenanga. 
National marques stood their ground, reaping market share from the non-nationals marques, especially Perodua, backed by strong sustained demand in the affordable segment, attractive new launches, and a downtrading trend by mid-market buyers.
Within the non-nationals marques, Mazda suffered the most due to slower new launches and being affected by intense competition from Chinese marques. We have the passenger vehicle segment in June 2025 at 49,804 units. 
A two-speed automotive market locally will persist stretching to end-2025 and flowing into calendar year 2026 (CY26).
It will be business as usual for the affordable segment as its target customers, that is, the B40 and lower tier M40 groups, will be spared the impact of the impending RON95 subsidy rationalization and could also potentially benefit from the introduction of the progressive wage model.
Government is still finalizing the mechanism to use for the RON95 subsidy rationalisation and expects that 90% of the Malaysian will not be affected. 

The upper-tier M40 and T15 groups may hold back from buying new cars, down-trade to smaller cars or switch to hybrids and EVs to cut their fuel bills upon the introduction of fuel subsidy rationalisation.
Concurrently, household bills will also be affected by the higher fuel bills, as well as expected 14% increase in base tariff for the higher-end usage which could also drive consumers to switch to solar-panels, in-turn boosting the demand for EV to funnel the excess grid electricity.
Additionally, EV routine maintenance costs are considerably lower than ICE’s due to fewer moving parts and wear & tear parts.
Vehicle sales will also be supported by new BEVs that enjoy SST exemption and other EV facilities incentives up until CY25 for CBUs and CY27 for CKDs.
The new registration for BEVs leapt from 274 units in CY21 to over 3,400 units in CY22, 13,301 units in CY23, and 21,789 units in CY24 (based on the Ministry of Transport’s press release), or 3% of TIV.
We expect more favourable incentives from the government which has set a national target for EVs and hybrid vehicles of 20% of TIV by CY30 and 38% by CY40.
Meanwhile, the government will speed up the approval for charging stations. The number of proposed charging stations is currently at 4,477 (4,161 built to date) and this should more than double to 10,000 by end-CY25. — Focus Malaysia

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