KUALA LUMPUR, 11 September 2025 – Bermaz Auto Bhd (BAuto) has reported a steep drop in earnings for the first quarter ended 31 July 2025 (Q1 FY26), as slowing sales of its Mazda and Kia marques collided with a highly competitive automotive landscape dominated by aggressive Chinese entrants.
The group’s net profit plunged 88% to RM8 million, down from RM70 million in the corresponding quarter last year. Revenue fell 41.9% to RM491.3 million, compared with RM846.2 million a year earlier. Profit before tax (PBT) also tumbled 80.6% to RM18.9 million, sharply lower than the RM97.8 million posted previously.
Sales Headwinds and Market Pressures
BAuto attributed the revenue contraction of RM354.9 million primarily to weaker domestic sales of certain Mazda and Kia models, many of which are approaching the end of their product lifecycles.
This downturn has been compounded by intensifying competition from Chinese automakers, whose aggressive pricing strategies are disrupting the Malaysian automotive market. With EVs and newer ICE models from Chinese brands flooding showrooms, established marques such as Mazda and Kia are finding it increasingly difficult to defend market share without steep discounts.
Impact from Associates and Costs
The earnings slump was worsened by the group’s share of losses from domestic associates, a reversal from the profit contribution in the same quarter last year.
Meanwhile, expenses under the company’s Employees’ Share Scheme (ESS) moderated to RM1.2 million, compared with RM2.0 million previously, providing only a marginal offset to weaker topline and operating performance.
XPeng Contributions and Future Outlook
The quarter also reflected early contributions from BAuto’s XPeng operations, which commenced in August 2024. While still in its infancy, the partnership signals BAuto’s attempt to diversify into the electric vehicle (EV) space to capture demand in the fast-growing segment.
Management did not provide detailed guidance but acknowledged that short-term headwinds remain significant, given the convergence of product lifecycle slowdowns, fierce competition, and changing consumer preferences. Investors will likely be watching closely for new model launches under Mazda, Kia, and XPeng to stabilise revenues in the quarters ahead.
Investor Takeaway
The weak Q1 results underscore the challenges facing Malaysia’s established automotive distributors as they confront structural disruption from Chinese brands. For BAuto, the near-term outlook hinges on refreshing its product pipeline, leveraging XPeng’s EV momentum, and managing margins in a hyper-competitive pricing environment.
Analysts suggest that until new Mazda and Kia launches take hold, earnings recovery may remain subdued, leaving shareholders braced for continued volatility in FY26.
