CKD Car Prices Set To Go Up By 20% In 2023

The price of locally-assembled (CKD) cars is expected to increase by 8% to 20% in 2023 based on the new open market value (OMV) calculation of excise duty.

This is because the waiver of excise duty which was deferred from 2020 until the end of 2022, will be resuming in 2023. 

Why CKD price increase?

Malaysian Automotive Association (MAA) President Datuk Aishah Ahmad said, however, MAA and its members are asking the government to revert to the old calculation to curb the increase of CKD car prices in 2023.

"We (MAA) have sent a proposal to the Ministry of Finance (MOF) to return to the old policy where only the cost of non-manufacturing items is included in the OMV calculation, which will reduce the price of the vehicle," said Aishah at the MAA AGM.

She continued by saying that the association has yet to receive any reply from the ministry.

Higher Margins Or?

She also reminded the public that if the prices do go up, it's not because automotive companies have increased their margins but because of the increase in taxes. 

"Buyers will be the ones affected by this move, which will cause car sales to drop," said the MAA President.

OMV is the final market value set for completed CKD vehicles from the factory before the government imposes any excise duty on them.

The MOF prepared the new Malaysian excise duty arrangement during the Pakatan Harapan administration which was gazetted on Dec 31, 2019.