KUALA LUMPUR: The issue of a change in methodology of how the open market value (OMV) of a vehicle is calculated that hangs over the automotive players for more than two years may soon be resolved.
The Malaysian Automotive Association (MAA) said the Finance Ministry (MoF) was "looking positively" at industry players' appeal against the implementation of a revised OMV calculation, which would make prices of vehicles more expensive.
MAA president Datuk Aishah Ahmad said it had sent another letter to the ministry to appeal against implementing the revised OMV.
Aishah said MAA also had a discussion with the Royal Malaysian Customs regarding the matter.
"We still have not received MoF's final approval letter (on the appeal to delay the implementation of the new OMV calculation). As far as we are concerned, MoF is still working on it but it should be positive," she told reporters at a press conference on industry performance for the first half of 2022 (1H22) today.
The revised method to calculate OMV, on which the excise duty on cars is imposed, had been gazetted by the Pakatan Harapan government in late 2019.
However, due to the Covid-19 pandemic over the last two years, the revised regulation has not been implemented.
Under the revised method, the OMV of a car will include sales costs such as advertisement and promotion, marketing, warranty and commissions, in addition to just manufacturing cost.
This would reportedly cause prices for locally-assembled vehicles to increase by between 8.0 and 20 per cent if new excise duty regulations were put in place.
Meanwhile, MAA has revised upward its projected total industry volume (TIV) to 630,000 new vehicles in 2022, up from the 600,000 units set earlier this year.
Aishah said this stemmed from expectations that Malaysia would continue its recovery, after the economy grew five per cent in the first quarter of 2022.
MAA believes with the government's consistent policy support and various economic stimulus packages, the country's economy will continue to improve during the second half of the year.
"For the automotive industry, despite not having the Pemerkasa Plus plan for car buyers to enjoy sales tax exemption extended beyond June 30, 2022, MAA members are pleased that the authorities have allowed buyers with confirmed booking to register their vehicles by March 31, 2023.
"This measure is indeed a positive one as it will help the automotive industry to full fill backlogged orders while at the same time allowing the Rakyat to enjoy lower price cars," Aishah said.
Of the total revised sales volume this year, passenger vehicles are expected to contribute 567,000 units, while commercial vehicles are 63,000 units.
The new TIV target of 630,000 units is higher than the 508,911 units registered in 2021.
For the first six months, the TIV increased 33 per cent to 331,386 units from 249,178 units registered in the corresponding period of 2021.
This was attributed to the pent-up demand for new vehicles during the period and the low base effect i.e., low TIV for the first-half of 2021 as a result of the implementation of full movement control order (FMCO) in June last year.
Total production volume during the first-half of 2022 jumped 31.8 per cent to a total of 317,933 units compared to 241,288 units in the same period last year.