Malaysia ended 2025 with its biggest-ever new-vehicle tally, but the industry body that tracks the numbers expects a gentler year ahead.
The Malaysian Automotive Association (MAA) reported total industry volume (TIV) of 820,752 units for 2025, a 0.5% rise from 816,747 in 2024 and the second consecutive year above 800,000 units.
For 2026, MAA forecasts 790,000 units, which implies a 3.8% pullback as buyers face tighter cost pressures and policy shifts that reshape pricing, especially for imported electric vehicles.
The policy detail is where things get interesting.
From January 2026, the blanket duty exemptions for fully imported (CBU) battery EVs no longer apply, while locally assembled (CKD) EVs continue to enjoy incentives through end-2027.
MAA expects the market to adapt, but it also signals that some of the “easy” EV demand in 2025 is pulled forward by the incentive deadline.
A strong year, helped by the macro backdrop
MAA’s own opinion on 2025 is that the economy has done enough to keep buyers comfortable: GDP grew 4.7% in the first three quarters, unemployment was around 2.9%, and the Overnight Policy Rate moved down to 2.75% from July. Those ingredients resulted in steadier loan approvals and less anxiety about taking on a new monthly payment.
Even so, the pace of growth was slim. The market did not explode in 2025. It inched higher. The breakdown revealed a more complex picture.
The year ended with a spike
MAA’s year-end briefing pointed to an unusually busy finish.
December logged 90,716 registrations, the highest single-month total on record. The fourth quarter reached 241,416 units, also described as a record quarter.
The driver is not subtle. Buyers and distributors sought to register CBU EVs before the incentives expired on Dec 31, 2025, and that deadline effect added urgency to deliveries already in the pipeline.
A more cautious way to read it is this: 2025’s record is real, but it is also timing-sensitive.
When a policy window closes, the market tends to bring forward demand, then spend the next year digesting it. MAA’s 2026 forecast reflects that risk.
National brands kept their grip, while commercial softens
The market’s centre of gravity stayed firmly with national makes. MAA reported 511,468 units for national brands, equal to a 62.3% market share. Although MAA did not state whether Proton or Perodua was ahead of the other, a look at Perodua’s sales performance for 2025 confirmed it took the lion’s share, with 359,904 vehicles sold. Non-national brands recorded 309,284 units for 37.7%.
Passenger vehicles rose 1.6% to 759,098 units, and SUVs remained a growth engine, up 13.4% to 228,572 units. Commercial vehicles moved the other way, falling 11.4% to 61,654 units. That drop is worth noting because it often tracks business sentiment and fleet renewal cycles.
Electrified vehicles grew quickly, off a small base
Electrified sales expanded sharply in 2025. Media reports put combined xEV (battery EV plus hybrids) at 69,363 units, up 52% year on year. BEVs rose 109% to 30,848 units, while hybrids increased 25% to 38,515 units.
Some of that growth was genuine adoption. Some were the same deadline effect that powered the December surge. The open question for 2026 is how demand would behave once CBU EVs carry duties again and pricing resets across more nameplates.
Production fell even as sales hit record
One of the more telling 2025 datapoints was that local production did not mirror the sales record. Total industry production declined 5.4% to 747,780 units.
MAA linked the gap between record registrations and lower production to a higher number of imported BEVs registered during the year, with the incentive expiry accelerating that flow in the final months. In plain terms, Malaysia bought more cars, but a larger slice arrived as imports.
What changes in 2026
With CBU EV exemptions gone, imported EVs are now facing 30% import duty, 10% excise duty and 10% sales tax, with import duty potentially lower for certain origins under Malaysia’s trade agreements if the paperwork met requirements. For example, EVs from China and Japan attract only 5% and 0% import tax respectively.
The Edge reported that distributors might not have repriced overnight because some vehicles cleared through customs before late-December cut-offs and could still be sold under earlier terms, and the full pricing impact might take a few months to work through.
MAA also flagged one domestic pressure point that has been in the news: the long-running OMV/402 excise valuation issue. It indicated the matter had been resolved and expected no CKD price increase when the current deferment period ends in mid-2026, as calculations are finalised across manufacturers.
For consumers, the story of 2026 will likely be less about a sudden stop and more about a market that normalises after an unusually busy finish to 2025.
For brands, it becomes a test of pricing strategy, promotions, and how quickly the EV pitch shifts from incentives to everyday value.
