On 29 October 2009, the government of Malaysia announced the results for the review of the National Auto Policy (NAP). While tariff levels for imports of vehicles and their components will be maintained at current levels, the following announced measures have trade implications.
- Manufacturing licences. Under the new NAP, additional manufacturing licences will be granted for luxury, hybrid and electric vehicles as well as pick-up trucks and certain motor cycles. Foreign companies may thus start and fully own production facilities for the mentioned vehicles in Malaysia.
- Tax exemption of exported goods. Goods that fulfill certain value added criteria qualify for exemption from statutory income tax of up to 50 percent.
- Used parts and components. The government plans to implement a mechanism that shall prohibit imports of used parts and components from June 2011.
- Used passenger and commercial vehicles, motorcycles. The government plans to prohibit imports of used commercial vehicles from 1 January 2016.
- Import licences for passenger vehicles. From 1 January 2010, the government plans to impose a fee of RM 10'000 (ca. USD 2921) for every issued import licence.
- Manufacturing of specific components for hybrid or electric vehicles are eligible for a 100% Pioneer Status (a preferential tax scheme) for ten year or 100% Investment Tax Allowance for five years
- Companies investing in the assembly or manufacturing of hybrid and electric vehicles will be eligible for 100% Investment Tax Allowance or Pioneer Status for ten years
- Additional grants for specific R&D and training are allocated
According to consistent press reports, the Malaysian government has imposed an import licensing scheme for passenger vehicles. Also, import ban for used car parts and components is to come into effect as planned on 1 June 2011. The first products are reported to be brake linings, brake pads, tyres and batteries.
The National Automotive Policy was again amended in 2014. Please see related measure.