Malaysia’s automotive industry reached a new milestone in 2025. Vehicle sales in the country totaled 820,752 units, the highest figure in the history of Malaysia’s automotive market, and made it the largest car market in Southeast Asia, surpassing Indonesia.
Data from the ASEAN Automotive Federation show that Malaysia now leads the region, followed by Indonesia with 803,687 units, then Thailand with 604,755 units, Viet Nam with 604,134 units, the Philippines with 491,395 units, Singapore with 62,671 units, and Myanmar with 3,150 units.
Malaysia Leads the Southeast Asian Automotive Market
The surge in Malaysia’s car sales did not happen overnight. In recent years, the country’s automotive market has continued to record strong growth.
Total industry volume (TIV) rose from 508,883 units in 2021 to 721,177 units in 2022, then to 799,821 units in 2023, before ultimately reaching a record 820,752 units in 2025.
This growth was driven by several relatively stable macroeconomic factors. Solid economic growth, strong domestic demand, and recovering exports all helped sustain the momentum of the automotive market. During the first three quarters of 2025, Malaysia’s gross domestic product grew by around 4.7 percent.
Financing conditions also played an important role. The reduction of the overnight policy rate to 2.75 percent in July 2025 made vehicle loans more affordable for consumers. On the other hand, the low unemployment rate, around 2.9 percent, the lowest in 11 years, supported household purchasing power.
In addition, the market was boosted by the launch of various new models, including electric vehicles, as well as aggressive sales promotions toward the end of the year.
Record Sales and Domestic Market Dynamics
The year 2025 also marked several important records for Malaysia’s automotive industry. In December 2025, monthly sales reached 90,716 units, the highest figure ever recorded.
Another record was set in the fourth quarter, with total sales of 241,416 units, making it the highest-selling quarter in history.
Passenger vehicle demand was the main driver of growth. The sport utility vehicle (SUV) segment posted a significant increase, with sales reaching 228,572 units, up about 13 percent compared to the previous year.
On the other hand, commercial vehicles saw a decline. Sales in this segment weakened after the removal of diesel subsidies in mid-2024, which affected operating costs and demand for commercial vehicles.
In terms of brands, national manufacturers continued to dominate the market. The market share of national brands rose to 62.3 percent, equivalent to 511,468 units. Perodua remained the market leader with 359,904 units, followed by Proton with 151,564 units.
Electrification Drives New Competition in the Region
Changes in Malaysia’s automotive market can also be seen in the rapid growth of electric vehicle sales. Throughout 2025, battery electric vehicle (BEV) registrations surged by 109 percent to 30,848 units. When combined with hybrid vehicles, total sales of electrified vehicles reached 69,363 units, up around 52 percent from the previous year.
This growth was driven by the increasing number of electric vehicle models on the market, rising consumer awareness, and the expansion of charging infrastructure. Even so, EV adoption in Malaysia is still at an early stage.
Meanwhile, Indonesia, which previously led the Southeast Asian automotive market, now ranks second with vehicle sales of 803,687 units in 2025, still above the industry association’s target of 780,000 units. However, several manufacturers believe this performance was largely driven by electric vehicle tax incentives that boosted EV purchases, especially from Chinese brands.
Elsewhere in the region, Viet Nam recorded a significant surge in electric vehicle sales. Local manufacturer VinFast posted sales of 175,000 units, nearly double the previous year’s figure, helping elevate Vietnam’s position in the regional automotive market.
Singapore showed a different dynamic. BYD became the best-selling brand throughout 2025 with sales of 11,184 units and a market share of 21.2 percent, amid electric vehicle penetration that reached 45 percent. This growth was supported by around 28,000 charging points and government incentives that remain in effect through 2026.
