Its been a a week of social media ‘MITI bashing’ and many have NOT seen the big picture …… yes …… there are reasons why The Ministry of Investment, Trade and Industry (MITI) updated its National Automotive Policy with rulings that are effective July 1, 2026 (they should have waited and do this for January 1st 2028).
This new policy primarily benefits legacy auto brands in Malaysia by protecting their market share from low-cost imports which have hit their ‘sales’ hard in the past few years.
You must note and remember that legacy auto brands have invested in Malaysia over the decades with local assembly factories, upgraded factory features, strong after sales network, spare parts warehousing and consistent staff training and upgrading manpower knowledge.
Which new Chinese auto brand in question has done any of the above in the past 3 to 4 years?
Which new Chinese auto brand has been investing heavily in technology transfer, manpower education, spare parts warehousing and even REAL local assembly?
Well, we know that a handful of new Chinese auto brands have built factories, hired dozens of Malaysians and trained many, however the Chinese auto brands that have been importing and selling cars with high rebates and not ‘contributing’ to the Malaysian tax office and eco-system are the ones deeply affected by this new MITI ruling.
By ending the special exemption period for fully imported (CBU) electric vehicles (EVs), the government has effectively raised the entry price for new competitors while incentivising established players with local assembly (CKD) capabilities.
Key Benefits for Legacy & National Brands
Proton is positioned as a major winner with its e.MAS 7 and e.MAS 5 models, which are produced locally and benefit from the push toward locally assembled alternatives.
Perodua is s a dominant local player and Perodua benefits from policies encouraging local assembly, protecting the market for its own future EV models.
Tan Chong (Nissan) and also GAC is a beneficiary due to its local partnership structure, with affordable EV like the Wuling Bingo Pro and Max.
While its current CBU lineup may be restricted, Toyota’s strong local manufacturing presence places it well to adapt through local assembly of higher-powered models, despite speculation that some current EV lineups might be impacted.
Brands with established CKD operations or high-end models (above RM300k) benefit as the price gap between them and the newly restricted CBU EVs narrows, making premium brands relatively more attractive.
Premium European Brands (BMW, Volvo, Mercedes-Benz) benefit from reduced competition in the below-RM300k, high-performance segment, as their locally assembled, high-performance models become relatively more competitively priced.
So! These new MITI rules signal a major policy shift toward prioritizing local assembly (CKD) over fully imported (CBU) models.
The new RM200,000 minimum CIF value and 180 kW motor output requirement for CBU EVs effectively pushes the retail price of imported models to approximately RM300,000–RM360,000.
This eliminates competition from affordable imported EVs, preserving the sub-RM200,000 segment for locally assembled models.
Brands that already have or are building local plants (XPENG, Chery and MG) are exempt from these CBU restrictions. This gives them a significant price advantage over purely import-based brands.
The ruling shifts the burden of cost onto new Chinese auto entrants like Changan, BAIC, Dongfeng, ArcFox and Honggi forcing them to either pivot to high-end luxury segments or commit to expensive local infrastructure.
