KUALA LUMPUR, July 21 — 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).

MAA president Mohd Shamsor Mohd Nor said about 52 per cent of the revised TIV projection is expected to be recorded in the remaining period of 2026, reflecting expectations of sustained market strength.

“However, the contribution from the commercial vehicle segment to total TIV this year is expected to decline to seven per cent from eight per cent previously. Basically, we expect to see some improvements following the introduction of the BUDI diesel subsidy,” he said at a press conference on MAA’s review of motor traders’ and manufacturers’ performance for the first half of 2026 (1H 2026) here, today.

Mohd Shamsor said national automotive brands continued to strengthen their market dominance, capturing 67 per cent of total new vehicle sales in Malaysia in 1H 2026. 

He said the encouraging performance was supported by stronger demand for sport utility vehicles (SUVs), rapid growth in electric and hybrid vehicle (xEV) sales, as well as sustained consumer confidence.

“The performance in the first half of this year was better compared with the same period last year and reflects the resilience of the domestic automotive market amid a stable economic environment and continued consumer demand,” he said.

Based on the latest review, MAA has also raised its xEV sales forecast to 120,000 units this year from the initial target of 100,000 units, with battery electric vehicles (BEVs) and hybrid electric vehicles (HEVs) each expected to contribute about 60,000 units.

From January to June 2026, Mohd Shamsor said national marques recorded sales of 256,304 units, an increase of four percentage points from the same period last year, while sales of non-national brands declined 6.2 per cent to 129,049 units from 137,675 units previously.

Overall, he said the automotive industry recorded TIV of 385,353 units in 1H 2026, compared with 373,636 units in the same period last year, representing a three per cent increase or 11,717 units.

At the same time, total industry production (TIP) increased 1.2 per cent or 4,320 units to 356,946 units from 352,626 units in the same period last year, with sales growth largely driven by a 19 per cent growth in the SUV segment, supported by the launch of new models, including electric vehicles (EVs) from national marques.

In addition, EV sales surged 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 with 1H 2025.

However, commercial vehicle sales, particularly pickup trucks, continued to decline by 11 per cent, following the impact of the withdrawal of diesel subsidies for private registrations.

Mohd Shamsor said several factors also supported industry performance, including the postponement of the implementation of Customs Order P.U.(A) 402 and the New Customised Incentive Mechanism (NCM) until the end of June, which provided greater certainty for manufacturers and distributors to continue their operations and sales activities.

According to him, consumer confidence, supported by stable employment conditions and household income, as well as attractive financing packages, flexible ownership programmes and aggressive promotional campaigns, also helped drive sales.

On the outlook for the second half of the year, he said demand is expected to continue being 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, as well as year-end sales promotions.

“However, the industry will continue to monitor external risks, including geopolitical developments, currency fluctuations, and global trade conditions that could affect market performance,” he added. — Bernama