Malaysia's Automobile Market Forecast for 2023

In 2022, Malaysia’s automobile sales are expected to grow by about 38% year-on-year to around 700,000 units. Such large increase is forecast following weak sales results in 2020 and 2021 which were triggered by the corona crisis. The market is expected to reach record high levels thanks to the strong purchasing power of Malaysians, the fact that Perodua, which drives the market, resolved the shortage of semiconductors in September 2022, and the effect of the sales tax reduction that ended at the end of June 2022 will continue for the time being due to delays in vehicle deliveries.

Automobile sales in 2023 are expected to be around 640,000 units, down about 9% from the 2022 forecast. The effect of the sales tax reduction for passenger vehicles is forecast to continue until March 2023, so the pre-pandemic level is likely to be maintained. However, in addition to economic slowdown, Malaysia’s vehicle ownership rate is high and the market is approaching maturity, so sales are expected to be lower compared to 2022.

On the other hand, in the 2023 budget proposal, it was announced that the duty and excise tax exemption period for imported BEVs will be extended by one year to the end of 2024. As a result, by 2023-2024, the number of BEVs sold annually is forecast to grow from several hundred to a thousand units.