Proton vs Perodua: and the winner is… the Malaysian driver

 Malaysia's two national carmakers are locked in their closest race since 2013. One sells rebadged Japanese engineering, the other rebadged Chinese engineering. The way the gap is closing tells us exactly where the global car industry is heading.

For over a decade, Malaysia’s national car race was no race at all. Perodua lapped Proton so routinely that the only suspense was the size of the winning margin.

But a change appears to be taking shape. In the first half of 2026, Proton registered 98,010 new vehicles, a jump of 40.5% and its best first half since 2002. Perodua still led comfortably with 158,295 units, but its sales slipped 4.7%.

A year ago, Perodua was outselling Proton by 2.4 cars to one. Today it is 1.6 to one, the closest the two have been since 2013. Together, the national brands now command 67% of the Malaysian market, leaving every foreign carmaker to squabble over the rest.

Let’s be honest about what this contest really is. Perodua’s cars are built on the bones of Japan’s Daihatsu, a Toyota subsidiary, with the Ativa being essentially a Daihatsu Rocky in local dress. Proton, meanwhile, has been 49.9% owned by China’s Geely since 2017, and its bestsellers began life as Geely models, with the X50 born as the Binyue and the X70 as the Boyue.

Strip away the badges and this is almost like a proxy war: Japanese car-making versus Chinese car-making, fought on Malaysian roads with Malaysian wallets as the prize.

The Geely effect

Cast your mind back to 2017. Proton was in the doldrums, with its market share near historic lows and its finances under strain. Then Geely took its stake, and the transformation has been remarkable.

Proton closed 2025 with 157,976 units sold and a 19.4% market share, alongside record exports. It is now gunning for 200,000 units in 2026. In January, it posted its highest monthly sales in 15 years.

The sharpest weapon in its arsenal is electric. The Proton e.MAS 7, a twin of the Geely Galaxy E5, was Malaysia’s bestselling EV through 2025, and the e.MAS brand became the fastest in the country to cross 20,000 electrified vehicle sales, doing it in under seven months. The cheaper e.MAS 5 pulled in more than 10,000 bookings within weeks of launch.

None of this should surprise anyone who has been watching China.

Why Chinese cars got so good

In 2025, China exported 8.32 million vehicles, its third straight year as the world’s largest car exporter. BYD alone sold 4.6 million vehicles globally, more than Ford.

This is not the story of cheap knock-offs flooding the market. Chinese carmakers dominate the EV supply chain from lithium refining to battery cells, develop new models in roughly half the time of legacy manufacturers, and treat a car as a smartphone on wheels, with software at its core.

Do not take my word for it. Take Jim Farley’s, the CEO of Ford, who called China’s EV progress “the most humbling thing I have ever seen”. He had a Xiaomi SU7 flown from Shanghai to Chicago, drove it for six months and admitted: “I don’t want to give it up.”

Farley’s warning to his own company was blunt: “If we lose this, we do not have a future Ford.” When the boss of an American icon talks like that about Chinese cars, a rebadged Geely stops sounding like a compromise and starts sounding like a head start.

Perodua punches back

To its credit, Perodua is not standing still. In December 2025, it launched the QV-E, billed as Malaysia’s first homegrown EV, developed for RM800 million with over 100 local engineers working on it and priced at RM80,000 with a battery subscription plan.

And Perodua’s fundamentals remain formidable. It sold a record 359,904 vehicles in 2025, making it the second biggest carmaker in Asean by sales, behind only Toyota. The Bezza, Axia and Myvi still own the affordable end of the market, and no one matches its cost discipline.

But notice the irony. The company built on Japanese engineering had to develop its own EV largely from scratch, because its Japanese partner had little to offer. Daihatsu has no ready-made passenger EV for Perodua to borrow, while Proton simply picks from Geely’s shelf.

What this means for Malaysia

Here is the uncomfortable question: does it matter that our national cars are other nations’ cars underneath? I would argue it matters far less than the pessimists think.

Malaysians are getting better cars at better prices than at any point in our history, and the fight for our ringgit is forcing both companies to improve. Proton’s Geely partnership has also brought real industrial capacity, with Malaysia’s first dedicated EV plant opening in Tanjung Malim in September 2025, inside an Automotive High-Tech Valley meant to anchor an entire supply chain.

The lesson of Japan, South Korea and China themselves is that every great car industry started by borrowing someone else’s homework. The trick is graduating from assembling other people’s ideas to generating your own, and the QV-E, whatever its commercial fate, shows the ambition is alive.

So watch the sales charts closely over the next 18 months. If Proton keeps growing at this pace, 2027 could bring something once unthinkable: a Chinese-engineered car dethroning a Japanese-engineered one as Malaysia’s favourite.

After a decade of a one-horse race, the battle for Malaysia’s driveways is finally worth watching again. And whichever badge takes the chequered flag, the Malaysian driver wins. - FMT

The writer can be contacted at kathirgugan@protonmail.com.

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.