MAA Forecasts 2026 TIV Decline as Chinese Carmakers Intensify Competition

The Malaysian Automotive Association (MAA) projects a decline in Total Industry Volume (TIV) for 2026, estimating sales at 790,000 units, down 3.8% year‑on‑year from 2025. The contraction is attributed to rising living costs, weaker consumer purchasing power, and the expiry of tax exemptions for completely built‑up (CBU) electric vehicles.

National brands Proton and Perodua are expected to remain resilient, supported by strong mass‑market demand. However, the non‑national segment faces mounting challenges, including potential excise duty changes and subdued consumer confidence. The competitive landscape is further reshaped by Chinese carmakers, who continue to gain market share by offering advanced technology at lower price points. Their aggressive positioning is redefining consumer expectations and squeezing profitability across the sector.

Chinese Carmakers Intensify Competition

Rystad Energy and industry analysts note that while Chinese brands are reshaping the market, earnings growth for established players remains limited. The shift in consumer preference towards affordable, tech‑driven models is forcing incumbents to recalibrate strategies.

Despite these pressures, Malaysia’s automotive sector is expected to consolidate rather than contract sharply, with investment flows directed toward efficiency and cost competitiveness. Proton and Perodua’s entrenched market presence provides some stability, but the broader industry outlook remains cautious.

Given these dynamics, we maintain a Neutral call on the automotive sector, reflecting both resilience in national brands and structural challenges in the non‑national segment.

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