Malaysia's car sales may surpass Indonesia, becoming the largest car sales country in Southeast Asia by 2025.

【PCauto】Latest figures project that car sales in Malaysia will reach between 780,000 and 800,000 units – a level that could see it overtake long-term leader Indonesia for the first time, becoming the ASEAN region’s annual car-sales champion.

The Malaysia Automotive Association (MAA) reported cumulative sales of 727,836 units for the first 11 months of 2025 – a slight decrease of 1.15% year-on-year, but still close to the annual target.

In contrast, Indonesia’s wholesale sales over the same period stood at 710,084 units, falling short of the 785,917 units recorded in the corresponding period of 2024 – a decline of 9.6%.

In fact, a pivotal shift had already emerged in the second quarter of 2025 (April to June), when Malaysia’s sales of 183,000 units overtook Indonesia’s 169,000 units on a quarterly basis for the first time.

Putu Juli Ardika, Chairman of the Indonesian Automotive Industry Association (Gaikindo), acknowledged in an interview that if the current trend continues, Malaysia is highly likely to achieve a historic overtake of Indonesia in annual total sales – a development that could dampen international investors’ confidence in Indonesia’s automotive sector.

The robust performance of Malaysia’s automotive market can be attributed to three key factors.

Firstly, local brands Perodua and Proton have shown strong market resilience, collectively holding around 60% of the market share.

During periods of economic uncertainty, their relatively affordable pricing has successfully attracted cost-conscious buyers.

Thirdly, 2025 is the final year to benefit from import incentives for pure electric vehicles – a policy that has boosted sales of popular models such as the Tesla Model Y and BYD Atto 3. According to statistics, Malaysia’s electric-vehicle sales grew by more than 200% year-on-year in the first ten months of 2025.

In contrast to Malaysia’s growth, the Indonesian market has been affected by the central bank’s sudden increase in the car-loan down-payment ratio to 30%, which has directly stalled middle-class car-purchase plans.

This shift in market dynamics has already started to reshape the ASEAN strategic planning of multinational automotive companies. Bob Azam, Vice Chairman of Toyota Motor Manufacturing Indonesia (TMMIN), noted that if the Indonesian market continues to soften, future investments could shift towards Malaysia.

It is important to note, however, that while Malaysia may lead in sales volume for 2025, Indonesia continues to be recognised for its substantial market potential, underpinned by a population of 270 million.

In 2025, Malaysia’s car sales approached 800,000 units, but this figure is underpinned by some 300,000 entry-level models such as the Perodua Axia and Bezza. By contrast, even with lower sales, mid-range models like the Toyota Avanza and Xpander still make up more than 35% of total sales in Indonesia.

Furthermore, a December 2025 document from Indonesia’s Ministry of Industry indicates that the country is drafting a “super-subsidy” policy for locally assembled PHEV models, aiming to reduce new-car landed prices by 18%. Competition in the regional automotive market is expected to remain intense in the year ahead.