Kuala Lumpur, 9 June 2025 —

The Malaysian automotive industry is undergoing a transformative shift as it embraces sustainability, electrification, and digital innovation in response to changing consumer demand and global trends. Industry leaders, government bodies, and key stakeholders are aligning efforts to position Malaysia as a regional hub for electric vehicles (EVs) and next-generation mobility solutions.

According to the Malaysian Automotive Association (MAA), total industry volume (TIV) is projected to reach 740,000 units in 2025, reflecting steady consumer confidence and pent-up demand following the post-pandemic recovery. Local manufacturers, including Proton and Perodua, are driving this growth through new model launches, improved safety features, and enhanced affordability.

Electrification on the Rise

A major theme shaping the industry is the accelerated push toward electrification. With the National Automotive Policy (NAP 2020) setting the foundation, several players have announced plans to expand their EV offerings. Global brands such as Tesla, BYD, and Hyundai have recently expanded their footprint in Malaysia, while local companies like Tenaga Nasional Berhad (TNB) and Gentari are actively investing in EV charging infrastructure.

"Malaysia is at a critical inflection point," said Datuk Aishah Ahmad, President of MAA. "We are seeing a significant rise in interest for electric and hybrid vehicles, and with the right ecosystem in place, we are confident in our capacity to lead the region in clean mobility."

Government Support and Incentives

The government’s commitment to green technology remains strong. Under Budget 2025, the Ministry of Investment, Trade and Industry (MITI) announced extended tax incentives for locally assembled EVs and components, aiming to attract foreign direct investment (FDI) and create high-skilled jobs. Additionally, the Low Carbon Mobility Blueprint 2021–2030 outlines strategic goals to reduce transport emissions and promote sustainable urban mobility.

Innovation and Digital Transformation

Beyond electrification, digital transformation is reshaping how Malaysians interact with vehicles. From AI-powered diagnostics to connected car services and seamless online vehicle purchases, digitalization is redefining customer experiences. Startups and platforms in the automotive tech space are rapidly emerging, supported by a growing pool of talent and venture capital interest.

Companies are also exploring autonomous driving technologies and smart manufacturing processes, in line with Industry 4.0 principles. Proton’s collaboration with Geely has enabled knowledge transfer in software development and smart vehicle integration, bringing cutting-edge technologies closer to Malaysian roads.

Export Potential and Regional Leadership

Malaysia’s strategic location and established supply chain ecosystem give it a unique advantage in becoming an automotive export hub. With rising demand from Southeast Asian markets, particularly Indonesia and Thailand, local manufacturers are increasing their production capacity to meet regional needs.

Perodua, for example, is targeting expanded exports to Brunei, Singapore, and even Africa, while DRB-HICOM has reaffirmed its long-term commitment to growing Proton’s presence beyond local borders.

Challenges Ahead

Despite the optimism, the industry continues to face challenges such as global chip shortages, fluctuating raw material costs, and the need for skilled labor in EV-related fields. Addressing these hurdles will require coordinated efforts between the public and private sectors.

Looking Ahead

As the automotive landscape evolves, Malaysia is well-positioned to drive innovation while remaining consumer-centric. With clear policies, strong local players, and growing international partnerships, the country is on track to become a major force in the future of mobility in Asia.