Price of Hybrid Electric Cars Might Increase in Malaysia

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Update (25 Jan 2014): Malaysia Ends Tax Break for Hybrid and Electric Cars Imported Completely Built

Currently all hybrid electrics car in Malaysia are exempt from import and excise duties. However, this exemption expires at the end of this year, unless the government renews it.  Some insiders suspect the exemption will only be extended to certain hybrid vehicles. If tax exemption is not extended, the price of those hybrid electric cars will increase in Malaysia.

In regards to take exemption, the Malaysian government groups the hybrid cars into two categories: CKD and CBU. CKD refers to vehicles that are locally assembled completely knocked-down, and CBU refers to vehicles imported completely built-up. Insiders suspect that the vehicles imported completely built-up will not be extended the tax exemption.

The undisclosed industry inside stated that the main hybrid car distributors in Malaysia, UMW Toyota Motor Sdn Bhd and Honda Malaysia Sdn Bhd, are preparing for the expiration of the tax exemption.

When the Malaysian government first introduced the tax exemption in Budget 2011, hybrid cars experienced significant sales growth in Malaysia.  The Malaysian Automotive Association stated in the 2010 year, just before the tax exemption, there were 322 hybrid vehicles sold. In the year 2011, with the tax exemption, 8,403 vehicles were sold. In 2012, the number reached 15,355 vehicles, as more companies entered the market. The hybid vehicle sales came from these four major car brands: Lexus, Toyota, Honda, and Porsche.

Many believe that the tax exemption is necessary to help strengthen interest in hybrid vehicles.  UMW Toyota Motor President Dtauk Ismet Suki said, “Without the tax incentives, hybrid cars would not be as attractively priced. More time is also needed to educate the public and improve awareness on these eco-friendly cars. We are also seriously looking at introducing new Toyota hybrids in Malaysia, or local assembly operations with the right incentives.”

Share your thoughts in the comments below.


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Photo Credit: BMW Group

Source of Story and Quotes: The Star Online

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Wilfred Lim

If the ruling group is truly environment-conscious, severe deforestation would not taken place…
driving the manufacturers to assemble locally does not please me much…given the QC of local assembler…
However i do hope they do able to provide good incentives for the manufacturers to move to CKD…
it just does not makes sense that only the Jazz Hybrid CKD rules the market…


That seems unfortunate if that were to happen. It seems important to grow the interest in this market and limiting tax incentives will just make this even more challenging than it already is.

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