Malaysia's 2026 automotive TIV forecast raised to 790,000 units

Malaysia's automotive sector is poised for growth, with the Total Industry Volume (TIV) for 2026 now projected to reach 790,000 units, an upward revision from the previous 750,000 units. This optimistic forecast stems from a more robust performance than anticipated in the first half of the year.

TA Securities has responded by upgrading its sector recommendation from "underweight" to "neutral." The research firm anticipates that the TIV decline in the second half of this year will be more controlled, around 9.1% year-on-year. This revised projection accounts for a high base effect due to initial purchases of completely built-up electric vehicles (EVs) in the latter half of 2025. Demand is expected to remain resilient, bolstered by new model introductions, appealing promotions, and sustained interest in national cars, EVs, and hybrid vehicles.

Data from the Malaysian Automotive Association (MAA) shows a significant rebound in June, with TIV jumping 9.6% month-on-month and 23.1% year-on-year. This recovery was primarily fueled by higher passenger vehicle sales, even as commercial vehicle sales saw a notable decrease of 23.9%. For the first half of 2026, TIV grew 2.6% year-on-year to 385,400 units, with the increase in passenger vehicles offsetting a 11.2% drop in the commercial segment.

The upgrade in the automotive sector's grade was also influenced by TA Securities' decision to upgrade Sime Darby Bhd shares from 'sell' to 'hold,' setting a target price of RM2.16. The recent dip in Sime Darby's stock price has improved return expectations for the company to a range of 7% to 12%. Given Sime Darby's significant weighting in TA Securities' coverage, the overall market return for the sector has moved into neutral territory.

Despite the positive TIV revision, TA Securities maintains a cautious stance on margin pressures. The firm retains its 'sell' recommendation for Bermaz Auto Bhd with a target price of RM0.89 and for MBM Resources Bhd at RM4.46.