Kuala lumpur: Malaysia's total industry volume (TIV) is now projected to reach 800,000 units in 2026, up from the earlier forecast of 790,000 units, driven by stronger-than-expected demand, according to the Malaysian Automotive Association (MAA).
According to BERNAMA News Agency, MAA president Mohd Shamsor Mohd Nor stated that approximately 52 per cent of the revised TIV projection is expected to be realized in the latter part of 2026, reflecting a sustained strength in the market. Despite this positive outlook, the contribution from the commercial vehicle segment to total TIV is anticipated to drop to seven per cent from eight per cent. Improvements are expected following the introduction of the BUDI diesel subsidy, as highlighted during a press conference on MAA's review of motor traders' and manufacturers' performance for the first half of 2026 (1H 2026).
Mohd Shamsor also noted the continued dominance of national automotive brands, which captured 67 per cent of total new vehicle sales in Malaysia in 1H 2026. The market performance is attributed to increased demand for sport utility vehicles (SUVs), rapid growth in electric and hybrid vehicle (xEV) sales, and ongoing consumer confidence.
The review indicated a raised xEV sales forecast to 120,000 units this year, up from the initial target of 100,000 units, with battery electric vehicles (BEVs) and hybrid electric vehicles (HEVs) each expected to contribute around 60,000 units. From January to June 2026, national marques recorded sales of 256,304 units, marking a four percentage point increase from the previous year, while non-national brands saw a decline of 6.2 per cent to 129,049 units from 137,675 units.
Overall, the automotive industry recorded a TIV of 385,353 units in 1H 2026, a three per cent increase or 11,717 units compared to the same period last year. Total industry production (TIP) also rose 1.2 per cent or 4,320 units to 356,946 units, driven largely by a 19 per cent growth in the SUV segment, supported by the launch of new models, including electric vehicles (EVs) from national marques.
Furthermore, EV sales surged by 106 per cent, while overall xEV sales, comprising BEVs, HEVs, plug-in hybrid electric vehicles (PHEVs), and fuel cell electric vehicles (FCEVs), rose 69 per cent compared to 1H 2025. However, commercial vehicle sales, particularly pickup trucks, declined by 11 per cent, impacted by the withdrawal of diesel subsidies for private registrations.
Mohd Shamsor mentioned that the industry's performance was bolstered by several factors, including the postponement of the Customs Order P.U.(A) 402 and the New Customised Incentive Mechanism (NCM) until the end of June, providing manufacturers and distributors with greater certainty to continue operations and sales activities. Consumer confidence, supported by stable employment conditions, household income, attractive financing packages, flexible ownership programmes, and aggressive promotional campaigns, also contributed to sales growth.
Looking ahead to the second half of the year, demand is expected to remain robust, supported by the launch of new SUV and xEV models, stable interest rates following Bank Negara Malaysia's decision to maintain the Overnight Policy Rate (OPR) at 2.75 per cent, and year-end sales promotions. However, the industry will continue to monitor external risks, including geopolitical developments, currency fluctuations, and global trade conditions that could impact market performance.