MAA: Car prices confirmed to increase after December 31, 2020

The Malaysian Automotive Association (MAA) has confirmed that new car prices are set to increase after December 31, 2020.

Its president, Datuk Aishah Ahmad has confirmed that the updated Open Market Value (OMV) calculations will bump car prices up, between 0-20%, depending on model.

She told reporters, “Any increase in OTR prices would be fully absorbed or exempted by the MoF for this year and the difference in duties for past years will also be exempted.”

She also said that the increase in car prices will be gradual and is set to kick in from 2021.

New vehicle prices were initially set to increase this year, but the MoF has postponed it until December 31, 2020.

This comes just a week after we broke the news that car prices are set to go up by 15 to 25 percent after Chinese New Year, due to the withdrawal of EEV incentives and changes in the OMV calculation.

Many companies were caught by surprise, as Perodua’s CEO Datuk Zainal said, “We have very frequent engagement with the government, a lot of items, including those related to the development of the automotive industry, but specifically for this excise duty, to be honest, no we have not been consulted, and that’s why I think now the industry is looking at this.”

Just yesterday, Finance Minister Lim Guan Eng told reporters that the increase in car prices are not confirmed and remains as speculations.

He said, “We often have discussions, because we need to keep to our obligations under WTO. In the interest of transparency, we need to ensure that car companies are filing their (financial) reports in a correct manner.”

It is interesting that he mentioned obligations under WTO, as the existence of Approved Permits (APs) alone violates the WTO. This was confirmed by MITI under the 2009 National Automotive Policy (NAP).

The previous Barisan National government made a U-turn in the policy following complaints by Open AP holders. After the Pakatan Harapan government took over, the made Open APs unlimited, as long as the AP holders meet MITI’s audit requirements.