1. Understanding the Landscape
Completely Built-Up (CBU) vehicles are imported fully assembled, typically incurring higher duties than locally assembled (CKD) units. This segment serves niche consumer demands for specific models not officially sold new or for higher-spec foreign versions.
PEKEMA highlights an increase from ~100 to ~300 AP holders, impacting AP distribution.
A direct revenue for the government (MITI) for each CBU import AP issued.
2. Import Volumes & Projections
Annual AP Quotas for Used Cars
PEKEMA has requested an increase in the annual AP quota from 35,000 to 50,000 units.
Quota vs. RMCD Valuations (2023)
A significant gap exists between the total Open AP quota and specific RMCD valuation applications for used CBU passenger cars (1,132 in 2023).
Total Estimated CIF Value of CBU Used Car Imports
Based on PEKEMA's operational scale under current and proposed AP quotas (Source: Report Table 1). Values in Billion RM.
3. The Tax Structure: How Revenue is Generated
Tax Calculation Flow for CBU Used Cars
(Original CIF - Depreciation)
(CV + Import Duty)
(CV + Import Duty + Excise Duty)
This cascading system means accurate initial valuation is crucial. An AP Fee of RM10,000 is also collected by MITI per unit.
(On customs value for MFN CBU cars)
Excise Duty Rates (Tiered)
- <1,800cc: 75% (cars), 65% (4WD)
- 1.8-2.0L: 80% (cars), 75% (4WD)
- 2.0-2.5L: 90%
- >2.5L: 105%
- MPV <1.5L: 60%
(Calculated on Customs Value + Import Duty)
(On CV + Import Duty + Excise Duty)
4. RMCD Revenue Impact: Estimates & Projections
Estimated Total Revenue (2023-2024)
Illustrative breakdown of revenue components based on 35,000 APs utilized (Source: Report Table 3). Values in Million RM.
Projected Total Revenue (2025 Scenarios)
Comparison of revenue under different AP quotas and valuation assumptions (Source: Report Table 4). Values in Million RM.
5. Key Challenges & Influencing Factors
📉 Valuation Accuracy
Under-declaration remains a significant challenge, leading to revenue leakage. Ongoing reviews aim to establish fairer and more consistent valuation methods, potentially including gazetted pricing.
👥 Open AP Liberalization
From July 2024, any qualified Bumiputera company can apply for an AP. This may increase AP holders, impacting competition and necessitating robust compliance monitoring by RMCD.
⚡ EV Market & Tax Exemptions
Growing EV imports (196 used, 533 new by Open AP companies Oct'20-Oct'23) currently benefit from full import/excise duty exemptions until Dec 31, 2025. Post-2025 tax treatment is critical for future revenue and EV adoption.
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6. The Path Forward: Policy & Stakeholder Actions
For RMCD 🛠️
- Enhance valuation capabilities (training, tools, gazetted prices).
- Strengthen enforcement and audits.
- Improve data collection for CBU used cars.
- Build capacity for liberalized AP market.
For Policymakers (MOF, MITI) 🏛️
- Coordinate AP policy with revenue goals.
- Provide clarity on future valuation frameworks.
- Strategically review post-2025 EV import taxation.
- Conduct holistic impact assessments for AP quota changes.
For PEKEMA 🚗
- Promote member compliance and best practices.
- Use data-driven advocacy for policy requests.
- Continue strategic diversification (e.g., EVs).
- Engage constructively on valuation/policy reforms.