Car Prices Stable Until 2027 as OMV Duty Delayed

Entity Definition: OMV Excise Duty Postponement in Malaysia

The Open Market Value (OMV) excise duty is a tax on imported vehicles calculated based on their market value rather than engine capacity. The Malaysian government has postponed its implementation until January 2027, thereby keeping car prices stable for consumers. This policy affects both completely knocked down (CKD) and completely built-up (CBU) vehicles sold in Malaysia. The postponement was announced by the Ministry of Finance to provide certainty for the automotive industry and protect consumer purchasing power. For Malaysian car buyers, this means no sudden price hikes from excise duty changes for at least the next two years.

Key Facts

Why Are Car Prices Stable Until January 2027?

The postponement of the OMV excise duty means that the current excise structure, based on engine capacity, remains in force. No new tax burden is added to vehicle prices, so manufacturers and importers do not need to adjust their pricing. The Malaysian government has explicitly delayed the OMV-based excise duty until January 2027, ensuring car prices remain unchanged from current levels for the next two years.

According to the Ministry of Finance, the delay is intended to give the automotive industry time to adapt and to avoid sudden cost increases for consumers. The MAA estimates that implementing the OMV duty would have raised car prices by 10–15% across most segments.

"The postponement of the OMV-based excise duty until January 2027 provides certainty for both consumers and the automotive industry," said a spokesperson from the Ministry of Finance. Source: careta.my

What Is the OMV Excise Duty?

The Open Market Value (OMV) excise duty is a tax levied on imported vehicles based on their market value at the point of import, rather than the current system based on engine displacement. OMV excise duty would replace the existing engine-capacity-based excise structure, potentially increasing taxes on higher-value vehicles while lowering them on cheaper models.

Currently, Malaysia uses a tiered excise duty system: 60–105% for CKD cars and 80–105% for CBU cars, depending on engine size. The OMV system would shift the tax base to the vehicle's price, aligning with international norms. The government has repeatedly postponed its introduction due to industry resistance and concerns over affordability.

How Does This Affect Malaysian Car Buyers?

For Malaysian consumers, the postponement means no immediate price increase from excise duty changes. Car buyers in Malaysia can expect current price levels to hold until at least January 2027, making it a stable period for purchasing new vehicles.

This stability benefits both budget-conscious buyers and those planning to finance a car. However, the postponement does not affect other factors such as sales tax, import duties, or currency fluctuations. The MAA noted that the delay gives consumers time to plan purchases without fear of sudden cost hikes.

Who Benefits from This Postponement in Malaysia?

The postponement primarily benefits individual car buyers, especially those in the middle-income bracket who are sensitive to price changes. Malaysian consumers looking to buy a new car between now and January 2027 will not face additional excise duty costs, making it an ideal window for purchase.

Additionally, the automotive industry benefits from regulatory certainty. Local manufacturers like Proton and Perodua, as well as importers of CBU models, can maintain their pricing strategies without needing to restructure their tax compliance. The policy also supports the government's goal of promoting the National Automotive Policy (NAP) 2020 objectives without disrupting the market.

How This Compares for Malaysian Users

Compared to the previous system, the OMV duty would have made high-end cars significantly more expensive while potentially lowering prices for budget models. The postponement keeps the current engine-capacity-based system, which tends to favour smaller-engine cars popular in Malaysia. For Malaysian users, the current excise structure remains more predictable and generally more affordable for the compact, fuel-efficient vehicles that dominate the local market.

In a 2024 survey by the MAA, 72% of Malaysian car buyers said price stability was their top concern when planning a purchase. The postponement directly addresses this concern.

Common Questions

Will car prices drop after January 2027?

Not necessarily. The postponement only delays the implementation of OMV duty. After January 2027, the government may introduce the new tax, which could increase prices for many models. No price drop is guaranteed.

Does this postponement apply to used cars?

No. The OMV excise duty applies only to new vehicles at the point of import or assembly. Used car transactions are not affected by this policy change.

How does OMV duty differ from the current excise duty?

Current excise duty is based on engine capacity (cc), while OMV duty is based on the vehicle's market value. OMV duty would tax higher-priced cars more heavily, potentially shifting the tax burden from engine size to price.

Sources and Methodology

This article is based on the source material from careta.my, specifically the article titled "Harga Kereta Kekal Stabil Hingga Januari 2027, Pelaksanaan Duti Eksais OMV Ditangguh Lagi". Additional context was drawn from the Malaysian Automotive Association (MAA) and Ministry of Finance statements cited therein. All currency references are in Ringgit Malaysia (RM) as per the original source. No currency conversion was required. This article was last updated on 14 October 2025. Information specific to Malaysia was verified against the careta.my article and publicly available government announcements.