No increase in CKD car prices until December 31, 2020

No increase in CKD car prices until December 31, 2020

With the uncertainty surrounding the possible increase in the prices of locally-assembled (CKD) cars in Malaysia, we finally have some clarity. The ministry of finance (MoF) has confirmed via statement by the Malaysian Automotive Association (MAA) that there will be no increase in CKD vehicle prices for a period of one year until December 31, 2020.

According to the statement, on-the-road (OTR) prices of CKD vehicles will remain as is due to the transparent reporting of the open market value (OMV) as outlined in the Excise (Determination of Value of Locally Manufactured Goods for the Purpose of Levying Excise Duty) Regulations 2019 dated December 31, 2019, which is in line with World Trade Organisation guidelines.

As a recap, OMV is the final market value of a CKD vehicle ex-factory, before the government imposes excise duties on it. An assortment of components determine the OMV, and these include the cost of the CKD pack, cost of manufacturing and components as well as assembly and administration charges.

This is different to that for a fully-imported CBU vehicle, which works on a price based on Cost, Insurance and Freight (CIF), to which import and excise duties are imposed. Excise duty is between 60% and 105% (regardless of CKD or CBU), calculated based on the car and its engine capacity, while import duty can reach up to 30%, depending on the vehicle’s country of manufacture. Vehicles from ASEAN countries are not imposed with import duty.

No increase in CKD car prices until December 31, 2020

With this announcement, increase in OTR pricing due to the new OMV calculations will be fully absorbed or exempted by the MoF effectively immediately, with car companies required to submit their OMV calculations for models affected by this new methodology to Customs.

Under the new regulations, the computed OMV to determine duties will now take into account not just the profit and general expenses incurred or accounted in the manufacture of a vehicle, but also of its sale. Additionally, any difference in duties for past years will also be exempted by the MoF.

However, does that mean there won’t be any potential increase in car CKD prices after the one-year grace period? Not according to the MAA president Datuk Aishah Ahmad, who told members of the media, “we don’t know the quantum of increase.” She noted that the new OMV calculations could see CKD car prices go up by varying degrees (0-20%), depending on the model, although any increases will be gradual in the coming years and would only begin from 2021.

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Gerard Lye

Originating from the corporate world with a background in finance and economics, Gerard’s strong love for cars led him to take the plunge into the automotive media industry. It was only then did he realise that there are more things to a car than just horsepower count.

 

Comments

  • Anapel on Jan 22, 2020 at 12:01 pm

    From promising car price reductions before take over public office, to actually increasing prices. Wow

    Well-loved. Like or Dislike: Thumb up 87 Thumb down 2
    • Rosman on Jan 22, 2020 at 1:39 pm

      Mane 30% car Price reduction? Mane?? hahaha

      Like or Dislike: Thumb up 25 Thumb down 0
      • Zaman Khan on Jan 22, 2020 at 4:23 pm

        I am also waiting BN’s promise to reduce car prices. From 2013 to 2018 our car prices went highe rand higher. So where is the 30% promise made by BN?

        Dulu pun kami kena tipooo.

        Like or Dislike: Thumb up 19 Thumb down 15
        • Rosman on Jan 22, 2020 at 6:25 pm

          2017- Honda Accord RM165k
          2020- Honda Accord RM200k

          Cukur BN tepati janji dulu. PH macam mana? Masih lagi mau naik harga? Pehhh!!!!

          Like or Dislike: Thumb up 17 Thumb down 1
          • Melayu on Jan 22, 2020 at 6:40 pm

            https://paultan.org/2018/02/05/have-cars-in-malaysia-become-cheaper-over-the-last-few-years-we-dissect-the-harga-kereta-turun-report/

            Zaman BN.

            Like or Dislike: Thumb up 11 Thumb down 6
          • Bezzalina on Jan 22, 2020 at 7:10 pm

            https://paultan.org/2016/04/07/car-prices-to-drop-30-by-2018-prime-ministers-dept/

            Like or Dislike: Thumb up 4 Thumb down 1
          • Rakyat Malaysia on Jan 22, 2020 at 7:24 pm

            https://paultan.org/2020/01/17/new-malaysia-excise-duty-regulations-introduced-for-2020-could-see-ckd-car-prices-rise-by-up-to-15/

            Zaman PH

            Like or Dislike: Thumb up 11 Thumb down 3
      • kentot on Jan 22, 2020 at 4:47 pm

        jangan tunggu lamalama

        Like or Dislike: Thumb up 0 Thumb down 0
  • benard on Jan 22, 2020 at 12:01 pm

    Stupid Guan Eng shooting himself in the foot.

    This will single handedly kill malaysian automotive industry, like what happened to Australia.

    Like or Dislike: Thumb up 36 Thumb down 10
  • Honda Salemsan Dont Be Too Jealous on Jan 22, 2020 at 12:08 pm

    Malaysians always cheated by DRB Honda. In Japan, Honda HRV got Honda Sensing consists of AEB, Blind Spot Monitor, Land Departure Warning, Rear Cross Traffic Alert and etc plus with good car quality and good aftersales service too!

    But for DRB Honda, they sells RM108K to RM123K for Honda HRV without Honda Sensing consists of AEB, Blind Spot Monitor, Land Departure Warning, Rear Cross Traffic Alert that you have missed ! Even Honda DRB assembles Honda Models in Melaka with super low quality!

    Somemore, still talking about Honda DRB, Malaysians who owned Honda cars, go to service centers and see. After few weeks later or several days later of taking their Honda cars out from service centers, people felt that still having same big problems and always have to spend spend spend for buying parts without problems solved just like buying new smaller A segment car.

    Now you know, This is how stupid Malaysians are. And How DRB Honda can protect the people safety lives when DRB Honda Safety is becoming more riskier to the customers.

    Well-loved. Like or Dislike: Thumb up 106 Thumb down 38
    • Honda Malaysia is majority owned by Honda Japan (more than 51%) not DRB. So it not DRB who have the final decision here. Please check your fact before you even speak!

      Like or Dislike: Thumb up 12 Thumb down 32
    • Seriously ?? Honda Japan owns and control 51% of Honda Malaysia. Why are you so butthurt on Honda when many other manufacturers also dont deliver their cars will full safety features. Its not like Honda don’t want to incorporate Honda Sensing into the HRV, the question is, ARE YOU WILLING TO PAY FOR IT ?? its not free….Dumbbell….Its already available for Accord, CRV, Odessey and Civic, yet you don’t mentioned that. Seems you are very biased in your comment. What about Mazda, Nissan, Toyota, Etc, does all their model have safety feature as Honda Sensing?? Please study before commenting…

      Like or Dislike: Thumb up 8 Thumb down 28
  • Karan on Jan 22, 2020 at 12:12 pm

    Looks like Honda Salesman will be more happy and surely will talk badmouth about mazda again.

    Like or Dislike: Thumb up 33 Thumb down 11
  • Raja Kamarul on Jan 22, 2020 at 12:15 pm

    Wait. Didn’t the government say car prices will drop? Oh wait…

    Like or Dislike: Thumb up 27 Thumb down 0
  • pakatan on Jan 22, 2020 at 12:16 pm

    korner sini, korner sana, gostan sini, gostan sana,Utun sini, Utun sana – The Symptom of PH Government

    Like or Dislike: Thumb up 31 Thumb down 0
    • YourNME on Jan 22, 2020 at 4:40 pm

      U-Turn sini, U-Turn sana, but no sign of U-Turn in this policy. I think jokers can be a better government than PH

      Like or Dislike: Thumb up 11 Thumb down 0
  • Confused and worried Gen Z on Jan 22, 2020 at 12:31 pm

    I’m rather confused. Does this mean that CBU prices will go down while CKD prices will go up?

    Is this going to affect car brands to shift from CKD to fully CBU? Will it cause them to down scale their installing factories? How will this affect our local economy?

    Like or Dislike: Thumb up 7 Thumb down 0
  • michelle on Jan 22, 2020 at 12:33 pm

    These Japanese Brands from ASEAN could see price hike probably since the import duty is not imposed. But BMW, Hyundai, Mercedes and other carmakers from other Europe will not be price hike which import duty will reduced maybe.

    Like or Dislike: Thumb up 6 Thumb down 0
  • digidigi on Jan 22, 2020 at 12:34 pm

    Wa pandai la, so we all know next year car price will increase, they will have good sales this year

    Like or Dislike: Thumb up 8 Thumb down 0
  • vivizurianti on Jan 22, 2020 at 12:37 pm

    hahahah…..no increase heh?

    Knowing how the govt works, I am sure there will be other means/venue to squeeze more blood money from rakyat.

    Case in point:
    Close one toll, open another toll.

    Like or Dislike: Thumb up 24 Thumb down 0
  • Yeah right. Until they UTurn later. This Pakatan UTurn can’t even be trusted to clean my drains or they would start playing in the gutters and not do their jobs.

    Like or Dislike: Thumb up 16 Thumb down 0
    • Uturnbetterthanthief on Jan 22, 2020 at 1:47 pm

      Even they do nothing is still better than someone stole our money and put into his own pocket.

      Like or Dislike: Thumb up 0 Thumb down 18
      • Angry Voters on Jan 22, 2020 at 6:28 pm

        I rather he steal money and put into his own pocket and he gave us lower car prices, lower petrol prices, lower taxes, lower tolls, BRIM, lower cost of living. At least he steals from the rich and gives back the poor.

        Ever heard of Robin Hood? Nobody said he was the bad guy, instead in every book, movie, plays, stories, he is the hero.

        Like or Dislike: Thumb up 16 Thumb down 0
      • Copy Paste on Jan 22, 2020 at 10:48 pm

        Copy paste: “Complete U turn from manifesto .. we don’t want liars in the government . Looks like thief better la”

        Like or Dislike: Thumb up 2 Thumb down 0
  • lilytan on Jan 22, 2020 at 12:47 pm

    And nobita said the gov are yet to have agreement on this..

    Like or Dislike: Thumb up 15 Thumb down 0
  • Quuite! ShIIIIIII !! on Jan 22, 2020 at 12:48 pm

    Most likely AFFECTED are the Hign End Cars with Values more than Rm100K. These cars values are extensively “Mark down” to have “reduced” taxes. And have been happening since the last Govn Admin whose “connection” with Finanace Ministry are extensive.

    Like or Dislike: Thumb up 2 Thumb down 11
  • msia driver on Jan 22, 2020 at 1:27 pm

    gov should remove all kind tax of the car and fix the car price ( like minyak makan, rice, sugar etc ) for avoid car distributors untung kaw kaw..

    Like or Dislike: Thumb up 3 Thumb down 2
  • newme on Jan 22, 2020 at 1:59 pm

    Fuh, what a relieve that no increase until year end.

    Like or Dislike: Thumb up 0 Thumb down 0
  • LGE no where to grab money dy

    Like or Dislike: Thumb up 4 Thumb down 0
  • U-turned boleh land on Jan 22, 2020 at 2:44 pm

    Just get a 1 yrs postponed… After that still the same… Increase again I believed those car maker shall withdraw from ckd in Malaysia already.

    Like or Dislike: Thumb up 2 Thumb down 0
  • Not Toyota Fan on Jan 22, 2020 at 3:01 pm

    Con-lan-firm price increase 1 Jan 2021.

    Janji tak di capati. Rakyat di ketepi kan. Minister semua dapat kereta baru. Gaji elaun YB tak turun pun. Syukur Msia Aman.

    Like or Dislike: Thumb up 9 Thumb down 0
  • Internal Secret News on Jan 22, 2020 at 3:38 pm

    Actually both the gawmen and car maker’s fault for so high car price. According to reliable sources, a Toyota Avanza inclusive of tax cost RM34k, A Toyota Camry 2.5V cost RM132k including tax and duties. So why car price so high? All go where? To the cronies in John’s UMW and gawmen la.

    Like or Dislike: Thumb up 1 Thumb down 5
    • msia driver on Jan 22, 2020 at 7:29 pm

      Toyota Avanza inclusive of tax cost RM34k, A Toyota Camry 2.5V cost RM132k

      actually lower than that…actually production cost for car is very dirt cheap.. Avanza only cost rm12k, Camry only rm35k

      Like or Dislike: Thumb up 1 Thumb down 2
      • Internal Secret News on Jan 23, 2020 at 3:31 pm

        I said cost of production + Tax & duties bro.
        I have the actual figures from import documents of both Toyota Avanza and Toyota Camry 2019 model.

        Like or Dislike: Thumb up 0 Thumb down 0
 

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