KUALA LUMPUR (Sept 23): Malaysia's targeted RON95 fuel subsidy (Budi95), which will come into effect on Sept 30, is expected to keep car demand steady and delay any major shift towards electric vehicles (EVs), according to research houses.
Hong Leong Investment Bank (HLIB) said the subsidy scheme effectively maintains the status quo for motorists, with little impact on total industry volume (TIV).
“According to a study by the Department of Statistics Malaysia (DOSM), over 99% of private vehicle owners consume less than 300 litres of petrol per month, staying within the subsidised quota,” HLIB said in a note on Tuesday.
The scheme entitles all Malaysians with a valid driving licence and MyKad to 300 litres of subsidised petrol per month at RM1.99 per litre, or RM597. E-hailing drivers will be granted higher allocations, while foreigners and corporates must pay the market price of RM2.60 per litre.
“As such, the programme is unlikely to drive a notable shift towards EVs or energy-efficient vehicles in the near term,” HLIB said.
However, heavy users such as long-distance commuters, logistics players and premium car owners will face higher effective fuel costs beyond the limit, which may gradually encourage a shift towards fuel-efficient cars, hybrids and EV, CIMB Securities flagged.
“For automakers, the policy provides near-term demand stability but could accelerate a structural transition in product mix towards efficiency and electrification. This trend would favour brands already expanding their cleaner mobility offerings,” it said in a note.
Besides the Budi95 fuel subsidy, the deferment of new excise duty rules will also help to keep vehicle demand steady this year, with Perusahaan Otomobil Kedua Sdn Bhd (Perodua) as the biggest beneficiary, according to Kenanga Investment Bank.
“We expect Perodua to benefit the most at 44% TIV market share with the highest localisation rate, attractive new launches, higher household income and a stable labour market,” Kenanga said.
All three research houses have maintained a “neutral” outlook on the sector, while keeping their full-year TIV forecasts largely unchanged, with HLIB projecting 770,000 units for 2025, CIMB Securities 760,000 units and Kenanga 805,000 units.
Meanwhile, MBM Resources Bhd (KL:MBMR) emerged as the top pick, being the largest dealer for Perodua.
HLIB and CIMB Securities also favoured Sime Darby Bhd (KL:SIME) for its diversified earnings and growing EV portfolio, while Kenanga preferred Hong Leong Industries Bhd (KL:HLIND) due to Yamaha's dominance in the motorcycle market.
CIMB Securities, however, downgraded Bermaz Auto Bhd (KL:BAUTO) to “reduce” on weaker Mazda sales.