Malaysian Car Sales Projected to Dip to 625,000 in 2024

IN A RECENT REPORT, RHB Research forecasts a decline in the total industry volume (TIV) for car sales in Malaysia, estimating a decrease to 625,000 units in 2024 after achieving a historic high of 799,000 in 2023. The research firm remains circumspect about the industry’s outlook, citing a lack of compelling factors to propel sales and earnings to new peaks.

As reported by NST, the year 2023 witnessed a robust performance, with the total production volume reaching 774,000 units. This surge was attributed to pent-up demand and the introduction of new car models. Notably, the second half of the year experienced an 18% uptick in TIV compared to the first half.

RHB Research attributes the exceptional sales performance in 2023 to pent-up demand and underscores the absence of similar catalysts in 2024. The research maintains a neutral stance on the auto and auto parts industry, with Bermaz Auto (BAUTO) identified as a top pick due to its 10% yield and resilient car sales.

Electric vehicle (EV) sales demonstrated substantial growth in 2023, surpassing 10,000 units and constituting 1.3% of the total TIV, up from 0.4% in 2022. Leading the local EV market was BYD, commanding a 37% share.

RHB Research anticipates a rise in EV adoption in 2024, facilitated by the introduction of new models, including Tesla’s Models 3 and Y, Neta’s V, and the Smart #1. However, it suggests that the EV market share might remain steady until post-2025 when the RM100,000 pricing floor on complete built unit EVs expires and local carmakers unveil their EV offerings.

The research indicates a softening of order backlogs, signaling a more tempered expectation for 2024. Despite the challenges, the EV market is poised for further growth in the coming years, especially after 2025.