1 day Ago By DIYANA ISAMUDIN
KUALA LUMPUR: Strong demand in the mass market and supportive government policies are expected to help sustain momentum in the automotive sector, despite projections of a decline in new vehicle sales.CIMB Securities Sdn Bhd maintains its forecast of a seven per cent decline in total industry volume (TIV) to 760,000 units for 2025, primarily driven by the potential removal of RON95 petrol subsidies and heightened competition in the premium segment.This contrasts with the Malaysian Automotive Association's forecast of a 4.
5 per cent decline in TIV, projecting 780,000 units for 2025.By the end of the first two months of this year, the TIV had dropped by 14.2 per cent, driven by lower sales in both the passenger vehicles and commercial vehicles segments, with a particularly steep decline in January.
Despite the potential decline, CIMB Securities anticipates resilient demand within the sub-RM100,000 segment, which remains dominated by national brands and select entry-level models from Japanese marques."Our economists forecast a relatively stable overnight policy rate for 2025. Additionally, the Malaysian government's plan to retain fuel subsidies for 85% of RON95 RON95users, as outlined in the 2025 budget, is expected to maintain affordability for the mass-market segment.
"As a result, we expect national brands to maintain their dominance, capturing a projected 64.5 per cent market share, compared with 35.5 per cent for non-national brands in 2025," the firm said.
CIMB Securities added that the removal of the RON95 petrol subsidy could accelerate the adoption of battery electric vehicles (EVs) this year.While Sime Darby is well positioned to benefit, the firm said rising competition within the segment, particularly from Chinese players, will likely persist."Duty exemptions for imported EV models are set to expire in 2026, after which domestic assembly will take precedence," it said.
CIMB Securities remains "neutral" in its rating of the sector owing to a subdued growth outlook amid intensifying market competition.© New Straits Times Press (M) Bhd.
