Malaysia’s Automotive Sector Hits Second Consecutive Sales Record in 2025

Malaysia’s automotive industry has maintained its upward momentum, closing out 2025 with a second successive year of record-breaking sales, reinforcing the sector’s ability to remain resilient amid shifting economic conditions and evolving consumer preferences. According to official figures released by the Malaysian Automotive Association (MAA), total industry volume (TIV) reached an all-time high of 820,752 vehicles last year.

While the growth rate was moderate, rising just 0.5% from the 816,747 units recorded in 2024, the result marks the second year in a row that the market has crossed the significant threshold of 800,000 units sold. This consistent performance signals a maturing yet still expanding market, supported by a mix of stable economic conditions and changing mobility trends.

MAA President Mohd Shamsor Mohd Zain described the achievement as a testament to the industry’s adaptability. “This milestone reflects our sector’s capacity to adjust and sustain growth even as economic structures and government policies evolve,” he explained during the release of the annual data. “The results were driven by steady consumer confidence, accessible financing options, and a rising acceptance of electrified vehicles, showing that the industry is not only growing but also transitioning toward more sustainable and advanced forms of transportation.”

The strength of demand was clearly visible toward the end of the year. December 2025 emerged as the strongest single month on record, with 90,716 units registered, comfortably exceeding the previous peak of 81,735 units set in December 2024. This late-year surge helped push the fourth-quarter total to 241,416 vehicles, demonstrating strong buying activity as consumers took advantage of year-end offers and existing incentives.

Economic fundamentals played a major role in this performance. Malaysia’s gross domestic product expanded by 4.7% during the first nine months of 2025, supported by solid domestic spending and a gradual recovery in export markets. Adding further support, the central bank reduced the overnight policy rate to 2.75% in July 2025, lowering borrowing costs and making vehicle financing more affordable for both individual buyers and businesses.

When looking at specific segments, passenger vehicles remained the main driver of growth, with sport utility vehicles (SUVs) standing out as the fastest‑growing category. Sales in this segment climbed 13% to reach 228,572 units, up from 201,565 units the year before, as buyers increasingly prioritise space, comfort, and versatility.

On the other hand, the commercial vehicle segment continued to face headwinds. Registrations fell by 11% in 2025, following a 14% decline in 2024. The MAA attributes this sustained drop largely to the removal of diesel subsidies in June 2024, which raised operating costs for logistics and transport operators and reduced the incentive to expand fleets.

Looking ahead to 2026, the outlook is more cautious. The MAA projects total sales to moderate to 790,000 units, consisting of 730,000 passenger vehicles and 60,000 commercial vehicles. Mohd Shamsor noted that growth is expected to slow as GDP expansion eases to between 4.0% and 4.5%, while global uncertainties, including shifting trade policies in the United States and ongoing geopolitical tensions, could impact business confidence and consumer spending.

Inflationary pressures also remain a concern, as rising costs for raw materials, components, and logistics may force manufacturers to adjust vehicle prices. Additionally, the expiry of tax incentives for imported electric vehicles at the end of 2025 and potential revisions to excise duties create uncertainty for the green mobility segment. Even so, interest in electrified vehicles continues to rise, though the association notes that broader adoption will depend heavily on developing local assembly capacity and improving infrastructure to make EVs more accessible to the mass market.

In terms of market share, national carmakers maintained their dominant position. Their combined share increased slightly by 0.4 percentage points to 62.3%, equivalent to 511,468 units, though their growth rate slowed to 1.1%. Meanwhile, non‑national brands saw sales ease to 309,258 units, largely due to weaker demand in the commercial segment, with their overall market share dipping marginally.

Interestingly, while sales reached a new peak, total industry production (TIP) declined by 5% to 747,780 units, down from 790,347 units in 2024. Mohd Shamsor clarified that this contrast was driven by a temporary shift in sourcing: many buyers brought forward purchases of fully built‑up battery electric vehicles before the end of the 2025 deadline for existing tax breaks, leading to higher imports and fewer locally assembled units during the year.

Overall, 2025 marked a year of stability and transition for Malaysia’s automotive industry. While the record sales figures are encouraging, the coming year will test whether the sector can continue its upward trajectory while navigating policy changes, rising costs, and the gradual shift toward cleaner mobility solutions.