Automotive Sector Revs Up To Another Resilient Performance In 2024 As First National EV Debuts

By Zairina Zainudin

KUALA LUMPUR, Dec 25 (Bernama) -- As 2024 draws to a close, the automotive industry stands out not only because of the better-than-expected vehicle sales for the third year running but also due to the much-anticipated launch of Malaysia’s very own electric vehicle (EV).

As Prime Minister Datuk Seri Anwar Ibrahim unveiled the sleek e.MAS 7 EV on Dec 16, priced from RM120,000 onward, it marked a key step toward Malaysia embracing electrification in line with the nation’s sustainable mobility goals.

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Rolling out the EV was another milestone for national carmaker Proton Holdings Bhd, which is expected to boost demand in the fast-growing EV market and drive overall auto sales.

Furthermore, in what was a clear reflection of consumers’ penchant for new cars, analysts and industry experts believe total industry volume (TIV) for 2024 will surpass that of 2023, marking the third consecutive year of an all-time high.

Key growth drivers include sustained demand in the affordable segment, attractive new launches, a robust domestic economy, healthy backlog orders and continued aggressive promotional strategies from car manufacturers.

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This year, Malaysia's automotive industry accelerated smoothly, demonstrating resilience and adaptability, reflecting steady growth and forward-thinking innovation.

Stronger Sales 

The Malaysian Automotive Association (MAA) had earlier projected the total TIV for 2024 to be 740,000 units, but revised it upwards in July to 765,000 units given the positive growth in the first half of the year (1H2024).

Between January and June 2024, total TIV rose 6.6 per cent year-on-year (y-o-y) to 390,296 units from 366,176 units in the same period in 2023, supported mainly by the strong showing in the passenger car subsegment which contributed the largest volume increase.

MAA’s continued optimism led it to revise the TIV again in November to 800,000 units.

The association reported that year-to-date vehicle sales in November 2024 increased by 1.4 per cent to 731,534 units, up from 721,392 units in the same period last year.

Passenger vehicle (PV) TIV rose 3.0 per cent y-o-y to 670,650 units, while commercial vehicle (CV) TIV dropped 17 per cent y-o-y to 60,884 units.

“We believe the automotive industry will achieve another record this year,” MAA president Mohd Shamsor Mohd Zain told Bernama.

As of October 2024, Perodua led the auto sales race in Malaysia with 294,090 units, followed by Proton (122,462 units) and Toyota (102,163 units).

In other brands, Honda sales were driven by the popular Civic, City and all-new HR-V; while Nissan showcased its face-lifted Serena S-Hybrid, Navara and Almera Turbo; followed by Proton with the all-new X70, X50 and X90; Perodua (the all-new Alza, all-new Axia, MyVi, Bezza and Ativa); Toyota (all-new Vios, Yaris, Corolla Cross and Hilux); and Mazda (CX-5, CX-8 and CX-30).

As for production, some 725,173 vehicles were manufactured in January-November 2024, up 3.0 per cent y-o-y from 708,376 units in the same period a year ago.

This included 683,262 PVs (+3.0 per cent y-o-y) and 41,911 CVs (-7.0 per cent y-o-y).

MAA expects TIV in December 2024 to be higher in November, on the back of aggressive year-end promotions, especially by companies having their financial year ending on Dec 31, 2024.

Electric Vehicles On The Rise

Growth in Malaysia’s automotive industry was also supported by sales of EVs, which soared by a whopping 112 per cent to 6,617 units in 1H2024 from the 3,117 units registered in 1H2023.

MAA said 15,884 hybrid vehicles were sold in 1H2024, bringing the number of electrified vehicles (xEV), which includes hybrids, plug-in hybrids and EVs, sold in the county during the period to 22,501 units.

Though the data is already impressive, officially, it does not include the 3,079 vehicles sold by Tesla during the period given that the American automaker is not a member of the MAA.

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz recently announced that xEVs on the road stood at 33,319 units as of Sept 30, approximately 5.0 per cent of the TIV.

This brisk EV adoption in the country was due to rising consumer interest, supportive government policies, initiatives and infrastructure development.

For instance, fully imported completely built-up (CBU) EVs were currently accorded full import and excise duty exemption until the end of December 2025, while locally assembled/completely knocked down (CKD) vehicles were exempted from excise and sales tax until the end of December 2027.

“These tax incentives should be further extended until 2030 in line with the government’s target of achieving 15 per cent xEV by 2030,” said MAA’s Mohd Shamsor.

Additionally, EV giants like BYD and Tesla, as well as Stellantis -- the world’s fourth-largest automaker and a leading mobility solutions provider -- have entered the Malaysian market, further boosting the industry's expansion.

Proton, through its new energy vehicle arm PRO-NET, made history with the launch of the e.MAS 7, marking it as the first EV by a Malaysian original equipment manufacturer (OEM)       

As for charging stations, an issue widely discussed among car owners, more than 3,171 charging stations have been installed nationwide as of Sept 30, 2024, including 813 direct current (DC) fast chargers.

The government is keeping to the target of 10,000 EV charging stations in the country by end-2025.

Diesel Subsidy, E-Invoicing In Focus

On June 10, the targeted diesel subsidy rationalisation programme was implemented to manage subsidies more efficiently and curb smuggling and the misuse of subsidised fuel, from which the government would save RM4 billion annually.

Undoubtedly an unpopular measure, especially for Malaysians who have enjoyed subsidies for umpteen years, the retail price of diesel rose to RM3.35 per litre from the blanket subsidised price of RM2.15.

Many analysts projected that it would not have a severe impact on consumers as diesel vehicles constitute less than 12 per cent of the total vehicles nationwide.

The government has also been magnanimous in providing targeted subsidies to eligible recipients and sectors. Vehicles that use diesel engines comprise pickup trucks, vans and commercial vehicles.

Besides private use, they are primarily used in the construction, plantation, logistics, tourism and transportation sectors.

The focus in the auto industry was also centered on the implementation of e-invoicing which aims to improve transparency in financial transactions.

Kenanga Investment Bank Bhd recently said e-invoicing had a limited impact on car sales as automakers step up efforts to provide discounts and rebates to sustain demand and alleviate consumer concerns

The investment bank said e-invoicing effectively halts the widespread practice of offering 100 per cent hire purchase financing, although, under the Hire Purchase Act 1967, customers are required to pay a minimum 10 per cent down payment for vehicle purchases.

Promising Outlook For Automotive Sector

The local automotive industry is poised for growth next year, leveraging targeted government policies, wage improvements and cost advantages, while navigating challenges from evolving consumer preferences and competition.

As such, the outlook remains optimistic in 2025 despite the impending changes in RON95 fuel subsidy policies and increased competition among industry players.

Under Budget 2025, the government plans to end blanket subsidies for RON95 fuel in the second half of the year.

Many expect that a two-tier pricing system will likely be introduced, where only the T15 income group and foreigners will pay market rates. This shift is not expected to significantly impact national OEMs, which primarily cater to the B40 and M40 segments.

The affordable car segment is expected to continue thriving, supported by targeted subsidies and the progressive wage model.

Wage increases for civil servants, ranging from 7.0 per cent to 15 per cent in December 2024, will also enhance purchasing power, offsetting inflationary pressures.

However, the mid-market segment may face challenges as the M40 group might delay purchases or opt for smaller EVs to mitigate higher fuel costs.

Additionally, the industry is witnessing intensified competition from Chinese OEMs offering competitively priced models with advanced features, creating pressure on established players.

On the brighter side, the stronger ringgit against the US dollar is projected to lower automotive part costs by 2H205, improving profit margins.

Mohd Shamsor said although the xEV market is still small, EVs will likely see greater expansion in the next two to three years, provided the government policies to boost cleaner and green vehicles continue.

Nevertheless, there should be a balance between emphasis on internal combustion engine (ICE)/hybrid vehicles and EVs, he said.

“This is to ensure the co-existence of both to minimise any adverse impact on the current ecosystem which may lead to workforce displacement and the sustainability of small and medium enterprises manufacturing parts and components for ICE/hybrid vehicles.

“Moreover, hybrid vehicles are also now more efficient in fuel economy and environmentally friendly,” Mohd Shamsor added.

To recap, xEVs sold last year totalled 38,214 units, higher than 22,619 units in 2022 and 8,153 units in 2021.

-- BERNAMA