Full Speed on a New Frontier: What’s the Ceiling for Chinese Automakers?

(Kuala Lumpur, Dec 30) With Proton and Perodua rolling out their respective electric vehicles, Malaysia’s two national carmakers are set to enter a fresh round of head-to-head competition next year.

Analysts at CIMB Securities noted that Proton’s launch of the new e.MAS 5 in November, followed by Perodua’s debut of the QV-E in December, is expected to further lift the share of locally branded battery electric vehicles (BEVs) in 2026.

In the first nine months of 2025, BEVs accounted for 4.1% of total new vehicle sales in Malaysia, up from 2.4% in 2024.

Still, the analysts cautioned that overall industry demand may soften. Malaysia’s Total Industry Volume (TIV) is projected to decline by 2% year-on-year in 2026 to 774,000 units, compared with an estimated 790,000 units in 2025, amid weaker consumer sentiment and persistent inflationary pressures.

They also highlighted that the tax exemption for fully imported (CBU) EVs is set to expire from January 2026, which could push up average prices for imported models. Additional headwinds may include intensifying competition from Chinese automakers and a potential government review of the Open Market Value (OMV) calculation methodology.

Despite these challenges, CIMB expects demand for Proton and Perodua to remain resilient, supported by first-time buyers, steady baseline market needs, and the continuation of the RON95 fuel subsidy under the BUDI95 programme.

On the competitive landscape, the analysts expect Chinese brands to keep expanding their market share in Malaysia through aggressive pricing, potentially squeezing growth for Japanese marques.

They added that the government’s decision to postpone the OMV revision by six months offers short-term breathing room for the industry—particularly benefiting automakers with a higher mix of locally assembled (CKD) models. This is seen as supportive for Japanese and European brands such as Toyota, Honda, Mazda, BMW and Mercedes-Benz.

Given muted growth prospects and rising competition, CIMB Securities maintained a “Neutral” rating on the automotive sector.