Malaysia Auto Sales Forecast Lifts to 805,000 Units on Strong First Half

Upgraded Forecast Reflects Momentum

RHB Research lifted its 2026 total industry volume forecast for Malaysia to 805,000 units, a 3.2% increase from its earlier projection of 780,000 units. The revision follows first-half sales of approximately 385,000 vehicles, which came in three per cent ahead of year-earlier levels and represented 49% of the research house's previous full-year estimate.

The upgrade reflects a combination of better-than-anticipated sales momentum and a supportive macroeconomic environment, according to RHB. Inflation measured 1.9% year-on-year in June, while the firm's economics team has raised its GDP growth outlook for the country. A stable Overnight Policy Rate, firm labour market and rising household incomes underpin the brighter demand picture.

Analyst Iftaar Hakim Rusli noted that historical patterns show first-half volume typically accounts for 46% to 48% of full-year sales. Applying that range to 2026 would imply annual volume between 806,000 and 844,000 units, translating to a decline of 2.0% to growth of 3.0% year-on-year. The 805,000-unit forecast sits at the lower end of that band, reflecting caution around cost pressures from global uncertainty and commodity price volatility.

New Models to Drive Second-Half Sales

The pipeline of new launches is expected to support stronger activity in the second half. Key arrivals include the Proton e.MAS 7 Premium Plus EV, the BYD Atto 3 and the Mazda CX-5. Bookings have also opened for the Jaecoo J5 EV and locally assembled Xpeng models, broadening the range of options available to buyers.

June sales climbed 10% month-on-month and 23% year-on-year to 67,879 units, according to RHB. The monthly increase was driven in part by a higher number of working days, which lifted production volume by 20% from May. Among national brands, Perodua recorded a 12% month-on-month gain, while Proton's sales slipped four per cent. Non-national marques posted a 21% rise, with Honda leading the advance on a 77% jump.

EV Registrations Accelerate

Electric vehicle registrations reached 6,215 units in June, up 23% from the prior month, bringing first-half registrations to around 32,000 vehicles. That represents 7.8% of total vehicle registrations, compared with 5.1% in the same period a year earlier, based on Road Transport Department data.

Proton led the June EV tally with 1,888 registrations, followed by BYD with 1,076 units and Tesla with 935 units. The data includes non-Malaysian Automotive Association members. Iftaar attributed the healthy EV growth largely to forward buying ahead of a new EV policy that took effect on July 1. Perodua registered 65 EVs in June, down from 80 units in May despite recent pricing adjustments.

Sector Rating Remains Neutral

Despite the higher volume forecast, RHB maintained a neutral stance on Malaysia's automotive sector. The research house cited policy uncertainty, inflationary risks and a moderation in the vehicle replacement cycle following four consecutive years of record total industry volume. The combination of those factors tempers enthusiasm even as near-term fundamentals look solid.

RHB kept neutral calls on Bermaz Auto with a target price of RM1.00 and MBM Resources at RM5.50. It retained buy ratings on Sime Darby at RM2.27 and Tan Chong Motor Holdings at 90 sen. The firm's outlook remains cautious on potential demand headwinds from cost-push pressures and the natural cooling of replacement demand after an extended period of elevated sales.

The revised forecast underscores the divergence between short-term resilience and longer-term structural concerns in Malaysia's auto market. Strong first-half results and an encouraging model pipeline provide near-term support, but the sector's ability to sustain momentum beyond 2026 will depend on how macroeconomic conditions evolve and whether buyers continue to refresh fleets at recent rates.