Kuala lumpur: Hong Leong Investment Bank Bhd (HLIB) anticipates that national original equipment manufacturers (OEMs) will maintain their sales momentum during the second half of 2026.
According to BERNAMA News Agency, HLIB expressed in a recent research note that while national OEMs are expected to thrive, non-national OEMs may face challenges due to growing competition in pricing and improved product offerings. The bank has reiterated its positive outlook on the automotive sector, largely due to the robust performance of national OEMs like Perusahaan Otomobil Kedua Sdn Bhd (Perodua) and Proton Holdings Bhd.
Perodua is expected to maintain its sales volume in 2026, bolstered by its strong market presence in the entry-level and affordable segments. Proton is also experiencing a surge in sales growth, fueled by high demand for its newly launched Saga replacement model and its affordable electric vehicle/plug-in hybrid electric vehicle (PHEV) models.
The Malaysian Automotive Association (MAA) reported that the total industry volume (TIV) increased by five per cent year-on-year to 73,615 units in July 2026, up from 70,057 units in the same month the previous year. This increase was attributed primarily to a rise in monthly production volume and sales. The TIV for the first seven months of 2026 remained strong at 459,000 units, marking a 2.7 per cent year-on-year growth.
Key OEMs such as Proton, Jetour, and Mazda showed significant year-on-year growth, according to HLIB. Electric vehicle sales in July reached 6,900 units, representing 9.4 per cent of the TIV, largely driven by Proton and BYD. HLIB has revised its TIV assumptions to 800,000 units from 780,000 units due to the strong performance of OEMs.
HLIB's top investment picks include MBM Resources Bhd, with a target price of RM7.10, and SIME, with a target price of RM2.85, due to their significant exposure to Perodua's sustained sales volume.
Meanwhile, Kenanga Investment Bank Bhd anticipates strong sales in August 2026, expecting a boost from Perodua as it lowers the Axia price by up to RM4,700. Kenanga maintains a neutral stance on the sector. The bank's 2026 TIV forecast of 800,000 units aligns with MAA's projection, driven by trends in discounts and rebates, delays in new open market value regulation, a surge of localized Chinese vehicles, and value-for-money offerings.
Kenanga's top investment picks are Bermaz Auto Bhd and SIME, with target prices of RM1.22 and RM2.75, respectively.