Editor's choice
5 May 20

Country Report Malaysia: an underdeveloped lease market

Vehicle leasing and fleet management company ALD has announced its entry to the Malaysian market a few weeks ago. Tim Albertsen, ALD’s CEO told Global Fleet at the time that “…the market is ready (and) our customers are ready.” Time for closer look at the South-East Asian country.

Market essentials

Malaysia is split into two regions, separated by the South China Sea. The first part, called “Peninsular Malaysia”, situated in between Singapore and Thailand is what most people associate with the country. The second region, “East Malaysia” is located on the island of Borneo, which hosts Brunei and Kalimantan, Indonesia’s part of Borneo.

About 33 million people live in Malaysia of which close to 2 million in its capital, Kuala Lumpur, commonly referred to as “KL”. Islam is the main religion, followed by Buddhism and Christianity. The Malaysians speak their own language, Malay, which has an Indonesian counterpart (Bahasa Indonesia). English is a common second language and, especially in business, absolutely not an issue.

Per capita GDP, according to the WorldBank is 11.373 USD, up from only 4.043 USD in the year 2000. It economy was traditionally focused on mining and agriculture, but significant effort have been made to diversify into tourism, manufacturing and electronics. Malaysia is today one of the global centers of Islamic Banking, a booming sector providing funding to Islamic businesses.

The country is also part of the ASEAN free trade agreement that has boosted exports amongst all South-East Asian countries.

Malaysia has one of the highest vehicles per population ratio (443), topped only by Brunei (721) and followed by Thailand (226). When including all motorized vehicles (motorcycles), the penetration exceeds 900 vehicles per 1000 people, again only surpassed by Brunei (close to a 1:1 ratio). Malaysia has invested massively in road infrastructure (as have the other South-East Asian countries) over the last few years and continues to invest.

Malaysia produces about 570.000 vehicles per year for 604.000 cars sold (source: Marklines). The manufacturing/assembly/parts industry is big and provides locally (assembly) or internationally (production) for many European brands (BMW, Mercedes, VW,…), Japanese brands (Toyota, Nissan, Mazda,…) and especially Chinese brands (Great Wall, Geely, BAIC, SAIC,…)

Malaysia has its own brand, called “Proton”, an acronym for acronym for PeRusahaan OTomobil Nasional (National Automobile Company). Established in 1983, the brand is relatively young and offered, initially, rebranded Mitsubishi models. Proton bought Lotus in 1996, hoping for the famous name to add a bit of cachet to its brand.

Mitsubishi divested its stake in Proton in 2005 and, after some more ownership changes, China’s Geely acquired 49,9% of Proton and 51% of Lotus. Thanks to Geely’s involvement, sales started growing and Proton realized its best year ever in 2019 (100.000 units).

But Proton is not the only local brand. Perodua surpasses Proton in sales, mainly thanks to the specific segment of ultra-compacts in which it excels. Perodua mainly produces rebranded Daihatsu cars; Daihatsu is also an important shareholder of the brand. 240.341 units were sold in 2019.

Car leasing
Malaysia is a typical car allowance country and leasing has not had the uptake of other South-East Asian countries, such as Thailand or Indonesia. Few local suppliers, such as Mayflower, offer long term leasing services, but not at very high volumes.

Leasing in Malaysia is expensive and lease versus buy studies typically don’t convince the corporate client to move away from outright purchase. In addition, employee purchase options at the end of the lease are common and considered as an employee benefit; another reason to buy rather than to lease.

LeasePlan has previously had operations in Malaysia, but has withdrawn in the meanwhile. ALD has decided to enter the market with a strong Japanese partner, MUL (Mitsubishi UFJ Lease & Finance Company) that is well established locally.


For more information on Malaysia and other fleet markets in APAC and across the globe, you can consult our WIKIFLEET section, where you can find a first insight into fleet markets in the world.


Authored by: Yves Helven