Motorcycle Prices Set to Rise 20% in Malaysia, Hitting B40 and M40 Groups Hard

New tax regulations could raise bike prices, hitting gig workers and commuters in the B40 and M40 groups.

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The livelihoods of many Malaysians, particularly those in the B40 and M40 income brackets, could be severely impacted as motorcycle prices are expected to rise by up to 20% in the near future. This potential increase stems from the implementation of the Excise (Determination of Value of Locally Manufactured Goods for the Purpose of Levying Excise Duty) Regulations 2019, which could significantly raise the cost of locally assembled motorcycles.

Excise duty, a legislated tax imposed on specific goods imported into or manufactured in Malaysia for domestic use, has been a contentious issue in the automotive industry. Earlier this month, the Malaysian Automotive Association (MAA) confirmed that the industry received a temporary reprieve with the deferment of the excise duty revision, also known as the Open Market Value (OMV) or ‘402’ regulation, until December 31, 2025. Without this deferment, the regulation would have taken effect on January 1, 2024, leading to a sharp increase in vehicle prices.

Impact on Motorcycle Prices

The Motorcycle and Scooter Assemblers and Distributors Association of Malaysia (MASAAM) has warned that the excise duty revision could push prices of Completely Knocked Down (CKD) motorcycles—vehicles assembled locally from imported parts—up by 10% to 20%. For example, a motorcycle currently priced at RM10,000 could cost between RM11,000 and RM12,000 after the revision.

MASAAM president Hoo Wan Ting emphasized that this price hike would disproportionately affect Malaysians in the B40 and M40 income groups, who rely heavily on motorcycles for affordable transportation. “For those in need of basic transportation, including gig economy workers like delivery riders, this will be a massive increase,” Hoo told automotive news portal paultan.org.

Hoo also highlighted that over 90% of the motorcycle market in Malaysia consists of CKD models, particularly in the more affordable range. Unlike the car market, which offers a mix of CKD and Completely Built-Up (CBU) models, the motorcycle industry is heavily reliant on locally assembled units. This makes the sector particularly vulnerable to the excise duty revision.

Broader Implications for the Automotive Industry

The excise duty revision, first introduced in 2019, was initially deferred multiple times due to its potential to disrupt the automotive industry. If implemented, it could have increased prices of CKD cars by up to 30%, dealing a severe blow to new car sales. A collapse in sales would not only affect original equipment manufacturers (OEMs) but also their local suppliers, potentially leading to job losses across the industry.

MAA president Mohd Shamsor Mohd Zain recently confirmed that the excise duty regulation has been deferred once again, this time until January 2026. However, unless the government decides to permanently shelve or revise the regulation, Malaysians could face significantly higher vehicle prices as early as next year.

Calls for Government Intervention

MASAAM, along with the Malaysian Automotive Association (MAA) and the Malaysia Automotive Component Parts Manufacturers (MACPMA), has urged the government to reconsider the Excise Regulations 2019. Hoo stressed that the revision would have a cascading effect on the economy, particularly for low- and middle-income earners who depend on motorcycles for their daily commute and livelihoods.

“In alignment with MAA and MACPMA, MASAAM would also like for the government to relook into the Excise Regulations 2019 situation to avoid significant cost impacts on consumers,” Hoo said.

What’s Next?

As it stands, the excise duty revision remains a looming threat to the affordability of motorcycles and cars in Malaysia. While the latest deferment provides temporary relief, the automotive industry and consumers alike are calling for a long-term solution to prevent price hikes that could disrupt livelihoods and economic stability.

For now, Malaysians can breathe a sigh of relief, but the clock is ticking. Unless the government takes decisive action, the new year could bring with it a steep rise in transportation costs, further straining the budgets of those who can least afford it.

This article is based on statements from industry leaders and reports from paultan.org. For further updates on this developing story, stay tuned to our coverage.