KUALA LUMPUR: The total industry volume (TIV) for new vehicle sales is expected to decline by four per cent year-on-year to 755,000 units in 2025, compared with 790,000 units in 2024, according to CIMB Securities Sdn Bhd.
In a research note, it said the decline is impacted by headwinds such as the potential removal of the RON95 petrol subsidy in mid-2025 and a possible revision of the open market value (OMV) calculation method that would effectively increase the excise duty.
Citing the Malaysian Automotive Association, the research house said the OMV calculation revision could raise the average selling prices of locally assembled vehicles by eight to 20 per cent, though the implementation has been extended until Dec 31, 2024.
OMV refers to the total value of the locally assembled vehicle at the ex-factory stage.
“Despite these challenges, removing the RON95 subsidy could accelerate the adoption of battery electric vehicles (BEVs).
“We also anticipate higher BEV adoption in 2025, driven by new model launches, new entrants, and rising competition among electric vehicle players ahead of the duty exemptions for imported models ending in 2026, after which domestic assembly will take precedence,” it said.
CIMB Securities noted that demand for national brands like Proton and Perodua is expected to remain robust, supported by first-time buyers and the mass-market segment, in addition to the government’s plan to retain subsidies for 85 per cent of RON95 users under Budget 2025.
“As a result, we expect national brands to maintain their dominance, capturing a 65 per cent market share, versus 35 per cent for non-national brands in 2025,” it added.
Meanwhile, CIMB Securities projected a three per cent net profit growth for the automotive sector in 2025, reversing the 23 per cent contraction in 2024, mainly driven by Sime Darby’s higher earnings from UMW, increased equipment sales and rentals, and a recovery in its China motors division due to improved cost control and economic rebound.
“Additionally, our economist forecasts potential ringgit strengthening against the US dollar in 2025, driven by expected interest rate cuts by the United States (US) Federal Reserve.
“This currency tailwind could further support net profit growth for the automotive sector in 2025,” it said.
Hence, CIMB Securities has maintained a “neutral” rating on the sector due to a subdued growth outlook amid intensifying market competition. – BERNAMA
