The Malaysian government has denied reports of a potential 30% price increase for locally assembled cars and motorcycles in 2026 due to revised excise tax regulations. While a one-year deferment was granted last month, the implementation of OMV/402 is still under review by the finance ministry, MITI, and the automotive industry. Concerns have been raised by industry players that the revised valuation method could lead to significant price hikes, impacting consumer affordability and potentially leading to job losses in the local manufacturing sector.
Gov’t denies up to 30% price hike for CKD cars, bikes in 2026 – OMV/402 excise revision still being reviewedthat has the local car and motorcycle industry up in arms. The finance ministry , together with the ministry of investment, trade and industry , said that reports of CKD locally assembled car/bike prices going up by up to 30% in 2026 are inaccurate.
“If that happens, there will be a lot of spiral down effects for the future years, in terms of lower sales, lower volume, especially for CKDs. It will also have an impact on our local industry, especially our suppliers. There’s a lot of after effects that we’re concerned about,” Mohd Shamsor added.that the auto industry contributes to more than 4% of Malaysia GDP and provides employment to over 200,000 people. Lower volume could cause plant closures and job losses.
It’s not just cars that will be affected. Hoo Wan Tim, president of Motorcycle and Scooter Assemblers and Distributors Association of Malaysia , told“MASAAM would also like for the government to relook into the OMV/402 situation to avoid a significant cost impact to the livelihoods of consumers. Especially so that when it comes to motorcycles, our consumers are mostly in the B40 and M40 groups that will be even more severely impacted.
Here’s an explanation of the bullet we just dodged, and how we got here. The controversial ‘402’ – gazetted on the last day of 2019 – stipulated a new methodology of calculating a CKD vehicle’s OMV, which influences how much tax is to be paid and therefore, its selling price. OMV is defined as the final market value of a CKD vehicle ex-factory, before the government imposes excise duties on it.
Automotive Excise Tax CKD Cars OMV/402 Automotive Industry Price Increase
Malaysia Latest News, Malaysia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Malaysia Delays Controversial Excise Duty Revision, Saving Automotive Industry from Price ShockThe Malaysian government has postponed the implementation of the Excise (Determination of Value of Locally Manufactured Goods for the Purpose of Levying Excise Duty) Regulations 2019, also known as the Open Market Value (OMV) or '402' excise duty revision, which was set to take effect on December 31, 2024. The postponement averts a potential price surge in locally assembled cars (CKD) and motorcycles, providing relief to both consumers and the automotive industry.
Read more »
Motorcycle Prices To Go Up By 20% In Malaysia If Excise Tax Is ImplementedThe tax regulations on motorcycles could impact Malaysians in the B40 and M40 income brackets, especially those in the gig economy.
Read more »
Malaysia Extends Excise Duty Review on Locally Assembled CarsThe Malaysian government has extended the review of excise duty for locally assembled (completely knocked down) cars until December 31, 2025. Despite this reprieve, prices are expected to increase significantly from 2026 due to the new excise tax regulations.
Read more »
Malaysia's MLFF Toll System Faces Delays Amidst Concessionaire DisputesThe implementation of Malaysia's Multi-Lane Free Flow (MLFF) toll collection system has been repeatedly delayed due to ongoing disagreements between the government and highway concessionaires.
Read more »
Malaysia's MLFF Toll System Still Faces Implementation DelaysMalaysia's Multi-Lane Free Flow (MLFF) toll collection system, aimed at easing traffic congestion, continues to face implementation delays. Negotiations with highway concessionaires have stalled, and the Works Minister, Alexander Nanta Linggi, states that the system requires further refinement before launch. Safety, efficiency, and leakage concerns remain key issues for authorities.
Read more »
Malaysia Prepares for ASEAN Chairmanship Amidst KLIA Aerotrain DelaysMalaysia has prepared facilities for its upcoming ASEAN chairmanship, including dedicated lanes for official delegations, despite ongoing delays with the Aerotrain Replacement Project at Kuala Lumpur International Airport (KLIA). Communications Minister Fahmi Fadzil affirmed that these facilities will ensure smooth proceedings for ASEAN activities and meetings.
Read more »