TA Securities analyst Angeline Chin said in a research note Monday that recent earnings data and monthly sales figures indicate headwinds for Malaysia’s auto industry.
“Recent earnings and monthly sales data suggest that softer consumer sentiment and moderating order backlogs are weighing on Malaysia’s auto sales momentum and margins,” Chin said.
The analyst also pointed to intensifying competition from Chinese automakers as an additional pressure. “Intensifying competition from Chinese marques is further exacerbating the pressure,” she said.
TA Securities maintained its 2026 Malaysia auto sales forecast at 750,000 units, a decline of 8.6% year-over-year. The downgrade to underweight from neutral reflects the brokerage’s assessment that the sector faces multiple headwinds without clear catalysts for recovery.
The brokerage issued sell ratings on three Malaysian auto-related stocks: Bermaz Auto, MBM Resources, and Sime Darby. The companies distribute or manufacture vehicles in the Malaysian market.
Chin said that new requirements for fully imported electric vehicles may provide some support to local car brands. “While the new requirements for fully imported electric vehicles may provide some support to local car brands,” she said, she expects the overall impact on sales to remain limited.
The downgrade comes as Malaysia’s auto sector faces pressure from weakening consumer purchasing power and rising competition from Chinese EV makers across Southeast Asia. The country’s auto sales had been recovering from pandemic-era lows, but softer demand and increased competition are weighing on growth prospects.