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The ASEAN automotive hierarchy saw a historic shift in 2025 as Malaysia overtook Indonesia to become the region’s largest car market. Data from the Malaysian Automotive Association (MAA) and GAIKINDO show Malaysia recorded 820,752 units in sales, slightly ahead of Indonesia’s 803,687 units—marking the first time the smaller nation claimed the top spot. The growth was powered by strong performances from national brands Perodua and Proton, which control nearly 60% of the market, supported by EV tax exemptions and a stable economy with 4.7% GDP growth.

Sales were further boosted by a year-end buying rush before tax holidays for fully imported EVs expired on December 31, 2025. Meanwhile, Indonesia faced headwinds as wholesale sales fell 7.2% due to high interest rates and a higher 30% minimum down-payment requirement, limiting middle-class buyers. Although exports hit a record 518,000 units, weak domestic demand has pushed some global manufacturers to consider shifting investments toward Malaysia.

The transformation is also driven by rapid electrification. Malaysia’s EV registrations more than doubled to over 44,000 units, led by the Proton e.MAS 7, BYD, and Tesla. As Vietnam narrows the gap with Thailand, competition within the ASEAN Big Three—Indonesia, Thailand, and Malaysia—is intensifying, showing that policy agility and infrastructure readiness now matter more than population size in determining market leadership.