Slowing Car Sales May Spark Price War - Analysts

Malaysia’s auto market is expected to cool down this year and analysts warn that this could ignite a fierce price war among carmakers, potentially giving buyers their best chance yet to secure attractive deals.

TA Securities, in its latest research note, downgraded the entire automotive sector to “Underweight” due to softer sales projections and a lack of new catalysts to spur demand.

“The anticipated price competition will likely squeeze automakers’ profit margins, with market share gains coming at the cost of profitability,” the note stated in a BH report.

Despite a strong August, industry momentum is slipping. Total industry volume (TIV) for the first eight months of 2025 dropped 3.8% year-on-year to 516,900 units. 

TA Securities maintained its 2025 forecast at 750,000 units, down 8.2% from last year, suggesting that the slowdown is not a one-off but part of a continuing trend.

The Malaysian Automotive Association (MAA) reported that August sales hit 73,000 units, driven by better vehicle stock availability, aggressive Merdeka promotions, and several new model launches.

Proton led the charge with a 10.9% month-on-month jump to 14,625 units, thanks to strong demand for its X50 and Saga models, nationwide promotions, and rising interest in EVs.

Perodua, however, saw sales slip 4.4% to 32,026 units, which analysts attribute to softer demand and inventory recalibration after strong sales in earlier months.

Looking ahead, MAA expects September to cool further, citing fewer working days due to public holidays and a cautious consumer mood ahead of Budget 2026, particularly over the government’s planned fuel subsidy rationalisation.

"While the outlook for automakers appears challenging, the situation may work in consumers’ favour. With competition heating up, buyers could see better promotions and discounts as brands fight to hold market share", it concluded.