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Kuala Lumpur: The automotive industry’s total industry volume (TIV) is expected to decline 2.0 per cent year-on-year to 774,000 units in 2026 from 790,000 units in 2025, weighed down by several headwinds.

This includes higher average selling prices and a potential revision to the open market value (OMV) calculation methodology that would effectively raise excise duties.

However, despite these challenges, CIMB Securities Sdn Bhd expects demand for national brands such as Proton and Perodua to remain resilient, supported by steady demand from first-time buyers and the mass-market segment, as well as the continuation of the RON95 petrol subsidy under the BUDI95 programme. 

In addition, the stockbroking firm expects Chinese brands to continue gaining traction in the domestic market at the expense of Japanese brands, driven by aggressive pricing strategies aimed at capturing greater market share.

“Meanwhile, we understand that the Ministry of Finance has informed the Malaysian Automotive Association (MAA) that the revision to the OMV calculation methodology will be deferred by another six months, to July 2026 from January 2026.

“We view this as a near-term relief for industry players, particularly for automakers with higher exposure to locally assembled vehicles. We think this will benefit Japanese and European brands such as Toyota, Honda, Mazda, BMW, and Mercedes-Benz,” CIMB Securities said in a research note. 

The stockbroking firm noted that MAA president Mohd Shamsor Mohd Zain has clarified that completely built-up (CBU) electric vehicles (EVs) entering Malaysia before Dec 28, 2025, would continue to qualify for import and excise duty exemptions, with eligibility determined by the vehicle’s entry date rather than delivery to customers.

“We believe this particularly benefits Chinese EV players such as BYD, Zeekr, and XPeng. Overall, these developments should provide near-term support to non-national vehicle demand in the first half of 2026,” it added. 

CIMB Securities also expects the national segment to have a higher share of battery electric vehicle (BEV) sales in 2026, following the launch of e.MAS 5 by Proton in November this year and QV-E by Perodua in December.

It noted that BEVs accounted for 4.1 per cent of total new vehicle sales in the first nine months of 2025, compared with 2.4 per cent in 2024, while total BEV and hybrid vehicle sales jumped 45 per cent year-on-year to 47,783 units, making up 8.2 per cent of TIV during the period.

CIMB Securities said CBU EVs would be subjected to an additional 30 per cent import duty and 10 per cent excise duty beginning January 2026.

“However, locally assembled EVs will continue to enjoy tax exemption until 2027. Hence, we think national brands are poised to capture a bigger EV market share from 2026F onwards as non-national brands gradually ramp up local assembly production,” it added.