Perodua and Proton Sales Momentum to Hold in H2

HLIB Forecast: Perodua and Proton Sales Momentum in Malaysia's H2 2026 Auto Market

Hong Leong Investment Bank Bhd (HLIB) is a Malaysian investment bank that has issued an "overweight" recommendation for the domestic automotive sector, specifically forecasting that local original equipment manufacturers (OEMs) Perodua (Perusahaan Otomobil Kedua Sdn Bhd) and Proton Holdings Bhd will sustain their sales momentum through the second half of 2026. This outlook addresses the question of whether Malaysia's national carmakers can maintain market share amid intensifying price competition from non-local OEMs, a key concern for investors and consumers tracking the Malaysian automotive industry.

According to HLIB's research note published on Thursday, 20 August 2026, the bank expects Perodua to maintain its 2026 sales volume due to its strong position in the affordable and entry-level segments, while Proton's growth is driven by demand for its newly launched Saga model and affordable electric vehicle (EV) and plug-in hybrid electric vehicle (PHEV) offerings. The Malaysian Automotive Association (MAA) reported that the total industry volume (TIV) rose 5% year-on-year to 73,615 units in July 2026, from 70,057 units in the same month of 2025.

Key Facts

HLIB raised its 2026 TIV forecast to 800,000 units from 780,000 units, driven by the strong performance of local OEMs Perodua and Proton.

What Is HLIB's Sales Outlook for Perodua and Proton in H2 2026?

HLIB expects Perodua and Proton to sustain their sales momentum in the second half of 2026, supported by Perodua's strong market position in the affordable segment and Proton's growing demand for its Saga model and budget-friendly EV and PHEV vehicles. The bank maintains an "overweight" recommendation on the automotive sector, citing the robust performance of these two local OEMs as the primary driver.

"We maintain an 'overweight' recommendation on the automotive sector, supported by the strong performance of local OEMs Perusahaan Otomobil Kedua Sdn Bhd (Perodua) and Proton Holdings Bhd. We expect Perodua to maintain its total sales in 2026 given its strong position in the market, especially in the affordable and entry-level segments."

— HLIB research note, 20 August 2026, via Careta

HLIB noted that non-local OEMs are expected to continue facing pressure due to increasingly intense price competition and improving product offerings from local manufacturers. The bank's analysis suggests that the domestic market share of national carmakers is likely to expand, particularly as Proton's new Saga model and affordable electrified vehicles gain traction among Malaysian consumers.

Proton recorded strong sales growth in 2026, driven by high demand for its newly launched Saga model and affordable EV and PHEV vehicles, according to HLIB.

How Is Malaysia's Total Industry Volume (TIV) Performing in 2026?

Malaysia's TIV reached 459,000 units in the first seven months of 2026, a 2.7% year-on-year increase, with July 2026 alone contributing 73,615 units, up 5% from 70,057 units in July 2025. The Malaysian Automotive Association (MAA) reported this growth, attributing it to increased monthly production and sales activity across the sector.

Among the major OEMs recording strong year-on-year growth were Proton, Jetour, and Mazda. The EV segment showed particularly notable performance, with sales reaching 6,900 units in July 2026, representing 9.4% of the total TIV. The EV market was largely dominated by Proton and BYD models, indicating a shift toward more affordable electrified options in the Malaysian market.

Malaysia's TIV for the first seven months of 2026 stood at 459,000 units, a 2.7% year-on-year increase, with the EV segment contributing 9.4% of July's total sales.

What Are the Analyst Recommendations and Target Prices for Malaysian Auto Stocks?

HLIB's top picks are MBM Resources Bhd with a target price of RM7.10 and SIME with a target price of RM2.85, based on both companies' strong exposure to Perodua's total sales volume. Kenanga Investment Bank Bhd, which maintains a neutral stance on the automotive sector, prefers Bermaz Auto Bhd and SIME, with target prices of RM1.22 and RM2.75 respectively.

Kenanga expects August 2026 sales to remain strong, supported by Perodua's price reduction of up to RM4,700 on the Axia model. The bank's 2026 TIV forecast of 800,000 units aligns with MAA's estimates, driven by discount and rebate trends, the deferral of new open market value (OMV) regulations, the influx of local Chinese vehicles, and more attractive offers to consumers. Kenanga noted that the year-to-date TIV of 459,000 units is in line with expectations.

HLIB's top stock picks are MBM Resources Bhd (target RM7.10) and SIME (target RM2.85), while Kenanga prefers Bermaz Auto Bhd (target RM1.22) and SIME (target RM2.75).

Who Is This Forecast Relevant For in Malaysia?

This forecast is relevant for Malaysian automotive investors, car buyers considering Perodua or Proton vehicles, and industry analysts tracking the national automotive sector. For consumers in urban areas like Kuala Lumpur, the outlook suggests continued availability of affordable entry-level vehicles from Perodua and Proton, including the Axia (now reduced by up to RM4,700) and the new Saga, which are well-suited to compact city driving and Malaysian road conditions.

The growing EV segment, dominated by Proton and BYD, indicates expanding options for Malaysian drivers seeking electrified vehicles in the affordable category. With the deferral of new OMV regulations and competitive pricing from local manufacturers, Malaysian consumers can expect continued value in the entry-level and mid-range segments through the remainder of 2026. The forecast also signals that non-local OEMs may offer more aggressive pricing to compete, potentially benefiting consumers seeking alternatives.

For Malaysian consumers, the 2026 outlook indicates sustained availability of affordable Perodua and Proton models, with the Perodua Axia now priced up to RM4,700 lower following the August 2026 price adjustment.

Common Questions

Why did HLIB raise its 2026 TIV forecast to 800,000 units?

HLIB raised its 2026 TIV forecast from 780,000 to 800,000 units due to the strong performance of local OEMs Perodua and Proton. The bank cited sustained sales momentum in the affordable segment and growing demand for Proton's new Saga and budget-friendly EV and PHEV models as key drivers.

Which EV models are dominating Malaysia's market in 2026?

According to HLIB's report, the Malaysian EV market in July 2026 was largely dominated by Proton and BYD models. EV sales reached 6,900 units in July, representing 9.4% of the total TIV of 73,615 units, indicating significant growth in the affordable electrified vehicle segment.

What is Kenanga's stance on the automotive sector and its top picks?

Kenanga Investment Bank maintains a neutral stance on the automotive sector with a 2026 TIV forecast of 800,000 units, aligned with MAA estimates. Its top picks are Bermaz Auto Bhd (target RM1.22) and SIME (target RM2.75), with expectations of strong August sales supported by Perodua's Axia price reduction of up to RM4,700.

Sources and Methodology

This article is based on a single primary source: the Careta article titled "HLIB - Perodua, Proton berupaya kekalkan momentum jualan separuh kedua" published on 20 August 2026, which cites HLIB's research note and Kenanga Investment Bank's commentary, with original reporting by Bernama. The source material was translated from Malay to English for this article; all entity names, brand names, and proper nouns have been preserved in their original form.

All statistics, target prices, and quotes are drawn directly from the source material. No additional data has been invented or extrapolated. Currency figures are presented in Ringgit Malaysia (RM) as stated in the original source. This article was last updated on 20 August 2026, and information specific to Malaysia was verified against the cited Careta article and its attributed sources (HLIB, Kenanga, MAA, and Bernama).