The Malaysian automotive sector began the year with a shift in momentum. Although the Total Industry Volume (TIV) for January recorded a typical seasonal decline, Proton recorded its highest monthly sales in 15 years, narrowing the gap with market leader Perodua.

According to the latest data released by the Malaysian Automotive Association (MAA), January TIV recorded a 29% decline from December, but a 29% increase compared with January of the previous year.

Despite the month-on-month contraction in overall industry volume, Proton posted a 46% increase from the preceding month. This resulted in a market share of 30.7%, the highest level since 2012.

The increase was driven primarily by the Saga, which remained a key contributor to overall volumes. The S70 MC1 also supported growth. The "Minor Change" (MC1) update replaced the previous three-cylinder engine with a 1.5-litre turbocharged four-cylinder engine and has generated interest since its introduction earlier in the month.

Perodua retained the leading position, although this reflected a 29% month-on-month decline. Competition in the B-segment increased as Perodua's new SUV, the Traz, a twin model of the Toyota Yaris Cross, competed with Proton's updated sedan line-up.

In the domestic electric vehicle (EV) market, Proton became the top-selling EV brand in Malaysia.

According to JPJ registration data, the Proton e.MAS 5 recorded higher monthly registrations than BYD. EV penetration in Malaysia reached 9.2% of total registrations, compared with 5.1% in 2025.

Perodua's first domestically developed EV, the QV-E, recorded a slower start. Analysts attributed this to its "Battery-as-a-Service" leasing model, priced at MYR 275 (US$ 70) per month, and a higher effective purchase price relative to the e.MAS 5, which may affect mass-market adoption.

Seasonal decline in 1Q26

A leading market research firm maintained a neutral outlook on the sector, projecting a softer first quarter due to fewer working days associated with the Lunar New Year and the upcoming Aidilfitri holidays.

The firm stated, "We expect TIV to soften in 1Q26 before rebounding in the second quarter." It further added that sector conditions remain supported by a stable macroeconomic environment and expectations of a potential reduction in the Overnight Policy Rate (OPR) later in the year.

The firm set a full-year TIV target for 2026, representing a 2% decline from the level achieved in 2025.