Malaysia’s locally assembled (CKD) vehicle prices will hold steady into the first half of 2026 after the Ministry of Finance again delayed a long-running change to how excise duty is calculated.
A Ministry letter to the Malaysian Automotive Association (MAA) dated Dec 23, 2025, grants a temporary excise duty waiver on three “non-manufacturing” cost components: cost of sale, general expenses and administration, and profit.
The waiver runs until June 30, 2026, keeping current CKD price lists intact until then, with any increases only expected from July onwards.
At the heart of the issue is P.U.(A) 402/2019, gazetted in 2019, which revises the Open Market Value (OMV) methodology used to calculate excise duty on locally assembled vehicles.
The updated OMV formula expands beyond factory and assembly costs to include marketing expenses, administrative overheads and profit margins — thereby increasing the dutiable value and, ultimately, retail prices.
MAA has repeatedly warned that the change could push CKD prices up by 10% to 30%, depending on the final mechanism.
In July 2025, MAA president Mohd Shamsor Mohd Zain cautioned that continued delays and regulatory ambiguity could trigger abrupt price jumps, leaving manufacturers in limbo ahead of what was then expected to be a January 2026 implementation.
The latest deferral marks yet another chapter in a policy saga stretching back to 2020.
Originally slated for 2020, implementation was first pushed to end-2022, then to end-2024, extended again to end-2025, and now postponed to mid-2026.
For automakers, the serial delays carry consequences beyond sticker prices.
Ongoing uncertainty erodes the cost advantage of CKD assembly over fully imported models and clouds long-term investment decisions critical to Malaysia’s automotive supplier base and regional manufacturing strategy.
