In 2024, Malaysia’s automotive industry seemed to have accelerated smoothly, demonstrating resilience and adaptability, reflecting steady growth and forward-thinking innovation.
On 16 December, Malaysia launched its very own EV – the sleek e.MAS 7 by Proton Holdings Bhd – priced from RM120,000 onward, marking a key step toward Malaysia embracing electrification in line with the nation’s sustainable mobility goals.
The introduction of e.MAS 7 is expected to boost demand in the fast-growing EV market within the country and drive overall auto sales.
As a clear reflection of consumers’ penchant for new cars, analysts and industry experts believe total industry volume (TIV) for 2024 will surpass the previous year, marking the third consecutive year of an all-time high.
Among the key growth drivers include sustained demand in the affordable segment, attractive new launches, a robust domestic economy, healthy backlog order and continued aggressive promotional strategies from car manufacturers.
Meanwhile, the Malaysia Automotive Association (MAA) had projected the total TIV for 2024 to be 740,000 units, but revised it upwards in July to reach 765,000 units, given the positive in the first half of the year (1H24).
Between January and June 2024, total Tiv rose 6.6% year-in-year (YoY) to 390,296 units from 366,176 units in the same period in 2023, supported mainly by the strong showing in the passenger car subsegment which contributed to the largest volume increase.
However, in November, MAA further revised the TIV again to reach 800,000 units, reporting that the year-to-date vehicle sales in November 2024 increased by 1.4% to 731,534 units, up from 721,392 units in the same period last year.
Passenger vehicle (PV) TIV rose 3% YoY to 670,650 units, while commercial vehicle (CV) TIV dropped 17% YoY to 60,884 units.
“We believe the automotive industry will achieve another record this year,” MAA president Mohd Shamsor Mohd Zain said.
As of October 2024, Perodua led the auto sales race in Malaysia with 294,090 units, followed by Proton (122,462 units) and Toyota (102,163 units).
As for production, some 725,173 vehicles were manufactured in January-November 2024, up 3% YoY from 708,376 units in the same period a year ago. This included 683,262 PVs (+3% YoY) and 41,911 CVs (-7% YoY).
MAA expects TIV in December 2024 to be higher in November, on the back of aggressive year-end promotions, especially by companies having their financial year ending on 31 December 2024.
EVs on the rise
Growth in Malaysia’s automotive industry was also supported by the sale of EVs, which soared by a whopping 112% to 6,617 units in 1H24 from the 3,117 units registered in 1H23.
According to the association, 15,884 hybrid vehicles were sold in 1H24, bringing the number of electrified vehicles (xEVs), which includes hybrids, plug-in hybrids and EVs, sold in the country during the period to 22,501 units.
Though the data is already impressive, officially, it does not include the 3,079 vehicles sold by Tesla during the period, given that the American automaker is not a member of the MAA.
Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz recently announced that xEVs on the road stood at 33,319 units as of 30 September, approximately 5% of the TIV.
This brisk EV adoption in the country was due to the rising consumer interest, supportive government policies, initiatives and infrastructure development.
Additionally, it was also boosted by EV giants like BYD, Tesla and Stellantis entering the Malaysian market, further driving the industry’s expansion.
As for charging stations, over 3,171 stations have been installed nationwide as of 30 September 2024, which included 813 direct current (DC) fast chargers. This is in line with the government’s target of achieving 10,000 EV charging stations in the country by end-2025.
With all this, the local automotive industry is poised for continued growth in 2025, leveraging on targeted government policies, wage improvements and cost advantages, while navigating challenges from evolving consumer preferences and competition.
This is especially since Budget 2025 announced that the government plans to end blanket subsidies for RON95 fuel in the second half of the year.
While many expect that a two-tier pricing system will likely be introduced where only the T15 income group and foreigners will pay market rates, the shift is not expected to significantly impact national original equipment manufacturers (OEMs), which primarily cater to the B40 and M40 segments.
However, the mid-market segment may face challenges as the M40 group might delay purchases or opt for smaller EVs to mitigate higher fuel costs.
Apart from that, the industry is witnessing intensified competition from Chinese OEMs offering competitively priced models with advanced features, creating pressure on established players.
Furthermore, Shamsor noted that although the xEV market is still small, EVs will likely see greater expansion in the next two to three years, provided the government policies to boost cleaner and green vehicles continue.
Nevertheless, he said that there should be a balance between emphasis on internal combustion engine (ICE)/hybrid vehicles and EVs.
“This is to ensure the co-existence of both to minimise any adverse impact on the current ecosystem which may lead to workforce displacement and the sustainability of small and medium enterprises (SMEs) manufacturing parts and components for IC/hybrid vehicles.
“Moreover, hybrid vehicles are also now more efficient in fuel economy and environmentally friendly,” Shamdor added.
In 2023, the total of xEVs sold reached 38,214 units, which is higher than 22,619 units in 2022 and 8,153 units in 2021.
The post Malaysia’s Automotive Sector Driven by EVs first appeared on Logistics Asia.
