There is a possibility the price of locally assembled completely knocked-down (CKD) cars could go up anywhere between crease by 8 to 20 percent next year, this is based on the new open market value (OMV) excise duty calculation method.
However, Malaysian Automotive Association president Datuk Aishah Ahmad said the industry has asked the government to revert to the previous calculation methodology to avoid an increase in CKD car prices.
“The implementation of the excise duty was postponed in 2020 to end-2022, and will be enforced starting next year We (MAA) have already submitted a proposal to the Finance Ministry (MoF) to revert to the previous policy which did not include non-manufacturing-related costs in calculating the OMV, thus lowering the car prices,” she said.
The new Malaysian excise duty arrangement was prepared by MoF during the Pakatan Harapan administration and was gazetted in Dec, 2019. Aishah said the OMV is the final market value set for CKD vehicles fresh out of the factory, before the addition of the excise duty.
She emphasised that automotive companies would not be increasing their margins and that the rise in car prices would be due to the increase in taxes.
The president went on to add that once again car buyers will be the ones affected by this move, and this, in turn, will cause car sales to drop.