AT the start of the year, Malaysian Automotive Association (MAA) forecasted a modest 4.5 per cent decline in 2025 vehicle sales to 780,000 units.
Following the release of February data, CIMB revised its projection lower to a 7 per cent decline (760,000 units).
Hong Leong Bank moved even faster, cutting its forecast to an 8.2 per cent decline (750,000 units).
However, first-quarter 2025 production data shows a sharper contraction – output is already down 16 per cent year-on-year, even before the impact of the anticipated “Trump tariff attacks” materialises.
Of greater concern, commercial vehicle sales have plummeted 33 per cent year-to-date, on top of a 13.8 per cent drop recorded last year.
Given that production is already down 16 per cent, it seems unrealistic to expect only a minor sales decline of 4.5 per cent, 7 per cent, or even 8.2 per cent.
As such, I believe further downward revisions from analysts are inevitable.
FIRST QUARTER 2025 PRODUCTION AND 2024 SALES DATA INDICATE FURTHER WEAKNESS
Refer to the data points I’ve compiled – first-quarter 2025 vehicle production figures (top table) alongside full-year 2024 vehicle sales compared to 2023 (bottom table).
Several concerning trends are emerging:
1. Both production and sales volumes in 1Q25 are weaker year-on-year relative to the same period in 2024, signalling a broad-based slowdown.
2. Commercial vehicle sales are deteriorating at an accelerated pace. After declining 13.8 per cent in 2024, they have contracted a further 33 per cent in 1Q25. This suggests deepening strain within Malaysia’s industrial sector, with businesses appearing increasingly reluctant to commit to new capital investments.
3. Vehicle production – across both passenger and commercial segments – has now fallen below sales levels in 1Q25, particularly in March 2025. This divergence points to waning manufacturer confidence in future demand and/or a sharp decline in new orders, indicating that vehicle sales are likely to weaken further over the coming months.
Overall, both the industrial sector and consumer purchasing power are exhibiting increasingly clear signs of stress.
This raises a critical question: if the economy is truly as resilient as claimed by the government, why is the automotive sector – one of the most sensitive indicators of consumer strength and industrial investment – now facing such a pronounced downturn?
The views expressed here are those of the columnist and do not necessarily represent the views of Sarawak Tribune. The writer can be reached at med.akilis@gmail.com
