Malaysia OMV Excise Duty Postponed to June 2026 for CKD Vehicles

On December 26, 2025, Malaysia confirmed another deferral to the Malaysia OMV excise duty, extending the implementation timeline for revised excise calculations on locally assembled vehicles. The announcement provides continued cost stability for the automotive industry, particularly for completely knocked down (CKD) models, as the government reassesses the scope and methodology of the proposed changes.
The update was communicated by the Malaysia’s Finance Ministry, which informed the Malaysian Automotive Association that the revised framework will now take effect on June 30, 2026. Until that date, no additional excise duties will be imposed on CKD vehicle costs, overheads, or profit components, preserving the current pricing structure for manufacturers and buyers.
What the Malaysia OMV excise duty revision proposes
At present, the open market value for CKD vehicles is calculated based on the ex-factory market value. This includes manufacturing expenses, parts, assembly processes, and administrative costs incurred during production. The planned revision aims to broaden this definition significantly, bringing non-production elements into the calculation.
Key additions proposed under the revised OMV methodology include:

• Sales and distribution expenses

• Marketing and promotional costs

• Manufacturer profit margins

By expanding the cost base, the revised approach could increase the assessed value of vehicles and, in turn, raise excise duties and retail prices once enforced.
Repeated delays and unresolved methodology
Although the revised OMV rules were first gazetted in 2019 with an original target implementation in 2020, enforcement has been postponed multiple times. The latest delay comes without a formal explanation from the government. However, industry representatives have indicated that the technical method for calculating the expanded OMV remains under development and has not yet been finalized.
This lack of clarity has been a consistent concern for manufacturers, as uncertainty around excise calculations complicates pricing strategies, investment planning, and long-term production decisions.
Industry impact and outlook for CKD production
Despite the prolonged uncertainty, industry sentiment remains relatively stable. The MAA leadership has indicated that the eventual implementation of the revised OMV framework is expected to have limited impact on local CKD production volumes or vehicle sales. This confidence is rooted in Malaysia’s broader policy direction, which continues to emphasize support for domestic manufacturing, localization, and automotive investment.
With the Malaysia OMV excise duty now deferred to mid-2026, automakers gain additional time to prepare for potential cost changes while maintaining competitive pricing in the near term. The coming months will be critical as stakeholders await final clarity on the calculation method and its real-world implications for the Malaysian automotive market.