Malaysia has the third largest automotive market in ASEAN, behind Indonesia and Thailand. A total of 550,000 passenger cars were sold in 2019, according to Malaysian Automotive Association (MAA). In the face of the increasingly competitive automotive market, it is imperative for automotive makers to understand the demand and preference of car buyers in order to stay relevant.
The objective of this research is to measure the demand of prospective car buyers by surveying 19,000 people aged 21 years and above across West Malaysia.
Spending Power of Prospective Buyers
Amongst the prospective buyers surveyed, 38% of respondents don’t intend to buy a car in the next 3 months. This is closely followed by 37% stating they have a budget of RM80k and below.
The demand for budget cars is in line with the market share of the new vehicle market. The Malaysian automotive market has always been dominated by affordable cars, with Perodua, Proton and Honda holding the largest market share of 39.8%, 16.6% and 14.1% respectively. These 3 brands collectively command 70% of the new vehicle market.
Market Breakdown by Demographics
Men are more likely to buy a car than women, whereas young adults are also more likely to buy a car than older adults. However, the percentage of prospective buyers with budget more than RM200K are similar across the age groups and gender.
Brand Popularity by Budget
We split the automotive market into two categories based on prospective buyers’ budget of below and above RM200k. Then, we asked their brand preference.
For budget RM200k and below, Honda is a clear leader with 29%, followed by Perodua and Toyota with 20% each. The discrepancy between Honda being the most popular brand and Perodua having the largest market share in the new vehicle market could possibly lies in the used car market. It is well established that Honda has very good resale value in the used car market. A new Perodua Myvi starts from RM43k whereas Honda Jazz starts from RM75k, a whopping 70% more expensive. Buyers who likes Honda but do not have the budget for a brand new Honda will look to the used car market, which this study does not dive into.
For budget above RM200k, Mercedes Benz is the most popular brand with 24%, followed by a tie between BMW and Toyota at 19% each.
Despite not being the most popular brand in either segments, Toyota ranks firmly in the top 3 for both segments.