No Discriminatory Terms For Carmakers, Conditions Apply Equally To All Auto Investments - MITI

KUALA LUMPUR, March 31 (Bernama) -- The Ministry of Investment, Trade and Industry (MITI) said it imposes no isolated unfavourable conditions on carmakers, stressing that the requirements reflect a consistent policy applied to all new automotive investments in Malaysia since September 2025.

This follows reports that Chinese electric vehicle (EV) manufacturer BYD is re-evaluating its plans for a local completely knocked down (CKD) assembly plant in Tanjung Malim, Perak, claiming that the government has imposed unfavourable conditions for the carmaker.

Its Minister Datuk Seri Johari Abdul Ghani said the attached conditions are non-discriminatory and are applicable equally to all high-volume automotive assembly projects regardless of brands and countries of origin.

“This is designed to ensure local assembly capacity moves toward sustainable, higher-value market segments and to avoid displacement of the established vendor ecosystem,” he said in a statement today.

The ministry emphasised that BYD is not singled out; the same condition applies to any new CKD entrant.

On the allegation that MITI imposed a condition that 80 per cent of BYD plant’s production must be exported, the ministry responded that the limitation in domestic sales to 10,000 units per year corresponds to 20 per cent of BYD’s total projected production capacity.

“This is a pro-export condition aimed at ensuring that investment contributes to Malaysia’s trade balance and global supply chain integration. It is not a restriction on total production but a strategic measure to encourage export orientation,” said Johari.

He also refuted the allegation that it imposed a condition that only 20 per cent of BYD’s production can be sold locally, and these vehicles must be priced above RM200,000.

“The allegation is inaccurate. The condition imposed for the domestic market is a minimum on the road (OTR) price of RM100,000 for BYD’s CKD vehicles sold domestically.

“This ensures local assembly focuses on higher-value segments, preserving market space for national players like Proton and Perodua while still offering affordable EV solutions,” said Johari.

Regarding the claim that the rule requiring imported completely built-up (CBU) EVs to be priced above RM250,000 contradicts the goal of making EVs accessible, Johari explained that this price is the standard minimum OTR cost for all passenger vehicles imported into the country as CBU under the Approved Permit (AP) Franchise policy.

“We introduced a temporary relaxation from 2022 until Dec 31, 2025, to encourage early-stage EV adoption. The government reduced the minimum OTR specifically for CBU EVs to RM100,000,” he said.

Johari also said there is no ban on the importation of new pick-up truck models.

“Commercial vehicles, including pickup trucks, are subject to CKD localisation requirements. CBU imports are permitted with a limited quota under the Market Research Pre-Assembly Approved Permit quota,” he said.

Johari emphasised that MITI’s approach focuses on development rather than protectionism.

“Malaysia also wishes to reaffirm that we remain genuinely open to Chinese automotive investment,” he said.

As at December 2025, out of 34 foreign automotive brands in the market, 14 are Chinese brands, including BYD, Chery, Jaecoo, Jetour, Haval, Wey, MG and Volvo, among others.

“BYD itself was granted an interim Manufacturing Licence on Sept 29, 2025, and Chery Automobile Co Ltd was also granted a Manufacturing Licence by MITI on June 26, 2025, making it another Chinese automaker to receive formal approval to manufacture vehicles locally.

“These approvals demonstrate that our policy framework is not a barrier to entry; it is a framework for meaningful, high-value participation from foreign investors,” said Johari.

-- BERNAMA