PETALING JAYA: Malaysia’s automotive sector is expected to see a moderation in sales momentum in early 2026 following a strong finish last year, as seasonal factors and intensifying competition is anticipated to weigh on industry performance.
BIMB Research said in a note to clients yesterday that the total industry volume is likely to ease quarter-on-quarter (q-o-q) in the first quarter of 2026 due to fewer working days and festive holidays, although underlying demand remains supported by promotions and existing order backlogs.
The research house said: “We maintain a ‘neutral’ stance on the automotive sector, as industry demand enters a normalisation phase following the post-lockdown and year-end delivery surge.”
It added that competitive pressures, particularly from Chinese marques and aggressive promotional campaigns, continue to weigh on margins in the mass-market segment.
Despite the cautious outlook, the sector’s fourth-quarter 2025 earnings were generally resilient, supported by strong year-end sales and improved production volumes.
Among the companies under BIMB Research’s coverage, MBM Resources Bhd (MBMR) and Sime Darby Bhd reported results that exceeded expectations, while Bermaz Auto Bhd (BAuto) delivered earnings broadly in line with forecasts.
MBMR posted revenue of RM737mil, representing a 15.9% q-o-q increase and an 11.5% year-on-year (y-o-y) rise, while its core net profit grew 6.8% from the previous quarter and 8.6% from a year earlier.
The improvement was driven by stronger contributions from Perodua and higher production volumes.
Meanwhile, Sime Darby recorded RM16.3bil in revenue, up 5.2% q-o-q and 7% y-o-y, while core net profit jumped 28% from the previous quarter and 40.3% from a year earlier to RM425mil.
The stronger performance was attributed to improved earnings from its automotive division and higher contributions from UMW Holdings.
BAuto also registered sequential improvement during the quarter. The Mazda distributor posted RM556mil in revenue, up 13.3% q-o-q, while core net profit rebounded 72% from the preceding quarter to RM14mil.
However, its earnings remained lower on a y-o-y basis due to a high comparison base and weaker sales volumes.
Overall, BIMB Research said all three companies showed sequential improvements in both revenue and profit, largely due to seasonal year-end demand.
However, it warned that earnings could moderate in the coming quarters as the industry adjusts to softer sales volumes and increased competition.