UOB Flags 5% Drop in 1H25 Car Sales, Sector Rated ‘Underweight’

Malaysia’s automotive sector took a hit in June 2025, with vehicle sales dropping sharply due to fewer working days and the impact of the festive season.

According to the Malaysian Automotive Association (MAA), as cited by UOB Kay Hian, only 54,832 vehicles were registered in June, down 19% month-on-month (MoM) and 6% year-on-year (YoY). That brought total industry volume (TIV) for the first half of 2025 to 373,636 units, marking a 5% YoY decline.

Both passenger and commercial segments were affected. Passenger car sales fell 21% MoM and 5% YoY, while commercial vehicles dipped 4% MoM and dropped 10% YoY.

Among local brands, Perodua’s June sales fell 29% MoM to 22,328 units. Proton wasn’t far behind with a 17% MoM drop to 10,638 units, just 1% below last year. UOB Kay Hian linked the declines to a post-festive cooldown and market caution following strong promotions in May.

Non-national brands also lost ground after gains in May. Honda saw sales fall 27% MoM and 36% YoY to 4,193 units. Toyota was down 12% MoM and 5% YoY at 5,324 units. Mazda and Nissan struggled even more, down 53% and 50% YoY, respectively.

But while most brands slowed, Chinese automakers continued gaining ground. Chery posted 882 units in June, up 11% MoM and a strong 85% YoY. Its 1H25 total rose 34% YoY. BYD climbed 57% YoY despite a slight monthly dip. Newcomers Jaecoo added 1,606 units respectively, showing growing interest in Chinese models.

This shift towards Chinese brands is starting to reshape the market, adding pressure on Japanese and other legacy marques, especially in the mid-range and value segments.

Looking ahead, second-quarter earnings for auto players are expected to stay flat or show only mild gains. UOB Kay Hian projects sector earnings to range between -1% and +6.6% quarter-on-quarter (QoQ), limited by soft sales and stiff competition.

BAuto is expected to post muted results as Mazda sales remain weak. Pecca, a key supplier for Perodua, could see a slight earnings dip as its customer’s volumes ease. Sime Darby’s outlook also appears soft due to underperformance in both its motors and industrial segments.

Despite the sluggish first half, UOB Kay Hian is keeping its full-year TIV forecast at 740,000 units, a 9% YoY drop. With 1H25 accounting for around half that figure, a stronger second half will depend on promotional campaigns and year-end buying momentum.

UOB Kay Hian maintains an overall “Underweight” rating on the sector, citing limited catalysts and ongoing competition. Additionally, at Carz.com.my we would also like to add in that data from MAA only reflects numbers declared by its members, there are quite a number of brands such as Tesla and also grey-importers who are not members hence their data is not included in MAA's report.