Malaysia auto sales hit all-time record in 2023 with 799,731 units, 11% up – 740k TIV forecasted for 2024

The bounce back from Covid is real, and very strong. The Malaysian Automotive Association (MAA) announced 2023 auto sales results today, and it’s an all-time record with close to 800,000 units sold. The 799,731 units total industry volume (TIV) is 11% higher than the 721,177 units achieved in 2022, which was a record then.

This is the second annual TIV gain since the downturn in 2020-2021 caused by the Covid-19 pandemic. It’s also the second consecutive year that TIV exceeded the 700,000 units mark. It’s the same for total production – up 10% to 774,600 units, an all-time high and the second consecutive year above the 700,000 mark.

What’s behind the boost?

MAA said that the record sales was propelled mainly by the passenger car sub-segment, amid a resilient domestic economy and a very much stable socio-political environment. One of the biggest factors was the fulfilment of SST-exempt bookings, a majority of which were registered before March 31.

Other factors include the launch of new models, including EVs with attractive prices (tax-free for CBUs) and a much-improved industry supply chain environment. The latter refers to the parts supply issue that plagued the industry post-Covid.

“Kudos to the government for steering the country into a very much stable socio- political environment and achieving much progress. Such favourable conditions have enabled businesses to thrive and succeed. On behalf of all MAA members, I would like to express our heartfelt and sincere appreciation to the government of Malaysia for all the support and assistance rendered to the automotive industry,” said MAA president Mohd Shamsor Mohd Zain.

Diving deeper into the headline figure, while both passenger vehicle and commercial vehicle segments registered growth in 2023, it’s the former that is responsible for the record – the 719,160 units sold is a 12% increase, contributing 89.9% to the cause.

Of all the passenger bodystyles, it’s the MPV that grew the most (27.6%). That would be a surprise, if not for the second-generation Perodua Alza, which had its first full year of sales in 2023. Passenger cars grew by 11.2% and SUVs 9.7%. One vehicle type classified as a CV but relevant to the carbuying public is the pick-up truck, which grew by a modest 1.5%.

National brands, the engine of growth

MAA no longer releases sales figures by brand, citing the Competition Act, but they’re allowed to show us the national vs non-national split, and unsurprisingly, the national brands (Perodua and Proton) are continuing their rise after dropping to below 50% market share from 2014 to 2018. That slump was mostly due to Proton low contribution, but with Geely at the wheel, the tide has turned. We’ve done a deep dive on this changing trend, so strap on your 200m watch and click here.

Last year, Perodua and Proton sold a combined 481,300 units, which translates to 66.9% share of the passenger vehicle market. This is up from 65.1% in 2022. Conversely, the non-national market share is now at 33.1%; that’s some 20% lower than the N-N peak in 2014-2015. Still, there was growth of 6% for the non-national makes, from 224,112 units in 2022 to 237,860 units.

Exponential growth for EVs

The most eye-popping set of figures came from electrified vehicles, which MAA brands as ‘xEV’. This includes hybrids and full EVs, or BEVs (B for battery).

Last year, xEV sales jumped 69% from 22,619 units in 2022 to 38,055 units, making up around 5% of the 2023 TIV. Of this total, 28,055 units were hybrids (BSG-type mild hybrids are included) while 10,159 units were battery electric vehicles. That means the year-on-year growth for hybrids is 40%, while EV growth is a massive 286% from 2022’s 2,631 units.

MAA says that its sales data are only from the association’s members. New entrant Tesla isn’t an MAA member, so the actual growth for EVs would have been slightly higher as Model 3 deliveries started in late November.

For 2024, MAA believes that the xEV demand and interest will continue to grow thanks to government support to promote the use of these ‘greener’ cars, as well the introduction of more new xEV models. Mohd Shamsor said that this year, the forecast is for xEVs to contribute 9-10% of TIV, and 2% for full EVs. Based on MAA’s 2024 TIV forecast of 740,000 units, that would be up to 74,000 xEVs and 14,800 EVs.

A comedown expected in 2024

MAA is expecting TIV to moderate by 7.5% to 740,000 units this year. Factors cited include macro ones such as the uncertain outlook for the global economy due to ongoing wars and geo-political tensions. While the International Monetary Fund (IMF) had forecasted that global economic growth would slow from 3% in 2023 to 2.9% this year, the Malaysian economy is expected to expand at 4-5% this year, driven by the domestic demand.

Of course, a slew of significant new models are on track to be launched in 2024, and Bank Negara Malaysia’s decision to maintain the benchmark overnight policy rate (OPR) at 3% at the most recent monetary policy committee meeting in November, are positive points.

While borrowing costs are not expected to go up, consumer spending may slow down due to concerns over the impending targeted subsidy rationalisation, high cost of living, implementation of the high value goods tax, and a higher service tax rate for some services including vehicle after sales. Click on the links to read more about the cited factors.

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