The prices of kapchais may go up as much as 20 percent from next year.
Motorcycle manufacturers and dealers say buyers will be affected by inevitable price hikes should the revised open market value (OMV) for vehicles is implemented.
The Malaysian Automotive Association (MAA) said in January the implementation of the revised OMV had been deferred once again after its expiration on Dec 31, 2024.
The OMV excise duty revision – officially known as the Excise (Determination of Value of Locally Manufactured Goods for the Purpose of Levying Excise Duty) Regulations 2019 or “OMV 402” – is now set to take effect in January 2026.
OMV 402 was originally scheduled to take effect in 2020, but the Covid-19 pandemic had the Finance Ministry putting it on hold until 2021. It was deferred again for 2021. MAA lobbied the government to defer OMV 402 and was granted a two-year extension until 31 December 2024.
The revised regulations OMV calculation stated that the profit and general expenses incurred or accounted in the manufacture of a vehicle, plus also of its sale value.
This revision leads to higher the taxable value of vehicles, resulting in higher prices.
The Motorcycle and Scooter Assemblers and Distributors Association of Malaysia (MASAAM) and the Malaysian Motorcycle and Scooter Dealers Association (MMSDA) raised concerns that manufacturers may struggle to fully absorb the increased duties.
This will potentially drive up motorcycle prices by 10 per cent to 20 per cent, depending on the models, they claimed. As such, kapchais currently priced at RM10,000 could cost between RM11,000 and RM12,000 after the revision.
This is not good news, given that the Malaysia motorcycle market is ‘soft’ lately. According to the Motor Cycle Data website which tracks the number of motorcycles that were actually delivered to buyers, Malaysia saw a -19.9% drop in 2024 compared to the 2022 record year.
