Kenanga IB, CGSI Expect Resilient Malaysia Automotive Sales In 2H2026 On EV, Hybrid Demand
KUALA LUMPUR, July 22 (Bernama) -- Malaysia's automotive sales are expected to remain resilient in the second half of 2026 (2H2026), supported by the introduction of more localised electric vehicle (EV) models and stronger demand for hybrid vehicles, fuelled by consumers' growing preference for new energy vehicles.
In a note today, Kenanga Investment Bank Bhd (Kenanga IB) said it had revised its 2026 total industry volume (TIV) forecast upwards to 800,000 units from 790,000 units previously, in line with the Malaysian Automotive Association's latest projection.
This followed stronger-than-expected EV sales despite tighter EV policies.
For the 1H2026, EV sales surged to 26,192 units as global automakers cleared existing completely built-up (CBU) inventories while transitioning to localised completely knocked down (CKD) assembly.
Hybrid vehicle sales also remained robust at 25,590 units and are expected to strengthen further in the 2H2026, supported by the launch of the Proton eMas 7 PHEV.
Meanwhile, commercial vehicle sales declined 11 per cent in 1H2026, mainly due to weaker pick-up truck sales following higher diesel prices before the implementation of the Budi Diesel subsidy programme.
"Our thesis for 2026 TIV encompasses a trend of discounts and rebates as a strategy to gain a head start in capturing market share, the new open-market-value (OMV) excise duty regulation which will be implemented gradually (delayed to Jan 2027 and potentially beyond) and a pre-tax cost, insurance and freight (CIF) floor price of RM200,000 for imported EVs implemented in July 2026," it said.
It noted that increasing localisation of Chinese vehicle brands, sustained demand for affordable vehicles, the new hire-purchase loan policies, a stable labour market and a pipeline of new model launches will contribute to the 2026 TIV.
"In general, the industry’s earnings visibility is still good, backed by a booking backlog of 152,000 units as at end-June 2026 which is higher than the average booking of 140,000 units in 2025, largely due to the addition of the all-new Proton Saga, which contributed 90,000 units to the backlog, although this was limited by production capacity.
“More than half of the backlog is made up of new models, alluding to the appeal of new models to car buyers," it said.
Kenanga IB added that EV sales will continue to record robust growth as global automakers clear existing CBU inventories while transitioning towards localised CKD assembly.
Meanwhile, CGS International (CGSI) expects Malaysia's automotive sector to record stronger sales momentum in 2H2026, underpinned by seasonal demand and continued promotional activities.
"Given seasonally stronger 2H2026 sales, we raise our 2026 TIV forecast to 780,000 units from 755,000 units, as we expect promotional activity to support 2H2026 sales momentum," it said.
CGSI said the revision followed stronger-than-expected first-half sales, with total industry volume reaching 385,353 units, equivalent to 51 per cent of its full-year forecast, driven by new model launches and promotional campaigns.
MAA reported that June 2026 TIV rose 23 per cent year-on-year and 10 per cent month-on-month to 67,879 units, supported by demand generated from the Kuala Lumpur International Mobility Show (KLIMS) and broad-based discounting despite fewer working days, while 1H2026 TIV increased three per cent to 385,353 units.
In terms of sector outlook, Kenanga IB kept its ‘neutral’ stance while CGSI maintained an ‘overweight’ rating, supported by stock-specific earnings catalysts despite a softer industry outlook.
-- BERNAMA