The government says its upcoming New Customised Incentive Mechanism (NCM) will have localisation as a key consideration in determining incentives for automotive companies. Aimed at encouraging genuine localisation, the mechanism will reward automakers building vehicles in the country with greater tax incentives, said investment, trade and industry (MITI) deputy minister Sim Tze Tzin.
“If you do more localisation, you’ll get more tax exemptions. If you do talent development, R&D, that kind of thing, then you will get more tax reduction,” he said on the sidelines of the Global Automotive and Technology Expo (GATE) 2026 yesterday.
He said the incentives could include reductions in excise duties, with companies that contribute more to Malaysia’s automotive ecosystem potentially receiving greater benefits, The Star reports. “The more they do, the better they get,” he said.
He said the government wanted car manufacturers to localise components, particularly critical ones, while investing in research and development and developing local talent. “We want true localisation. The objective is on real localisation,” he said, echoing what MITI minister Datuk Seri Johari Abdul Ghani said last month.
Sim said the NCM will cover incentives for both internal combustion engine (ICE) vehicles and electric vehicles (EVs) when it is introduced. He added that the revamped mechanism will be simplified to make it less complex for businesses, while maintaining its focus on localisation.
He said the approach was intended to encourage carmakers to build a deeper presence in Malaysia rather than relying heavily on imports, while helping to strengthen the country’s automotive supply chain. He added that greater incentives brought about by higher levels of localisation could ultimately translate into cheaper vehicles for Malaysian consumers.
Details of the revised mechanism are still being refined and have yet to be finalised, but Sim said the ministry would engage industry players before its implementation. “Good policy needs some time, and we will start engaging with the industry,” he said.
The implementation of the NCM, which has been in the works for some time, is set to happen next year, a timeline that was reiterated by Sim. “From next year onwards, the new customised mechanism will come in,” he said.
u-turn decision from previous strict requirement that scared off BYD from setting up factory, I guess this is the result of further negotiation, not bad at all, as long as benefited Malaysians
this specific type of “people” are the most dangerous to deal with. Imagine spending billions, only to be backstabbed by the same “people”. Very scary and evil, now China also know this “people” behavior.
Ensure all workers for these ckd chinese brands are Malaysian. Otherwise, they are NOT welcome here. Shoo, go away!
last desperate attempt jaga who interest before election? or create another road block for next government that replace this obsolete politician.
All this to protect Geely and Daihatsu@ Toyota….there’s no msian brand, all are re badge cars now…..go check out Bobo Borak Motorsiput at Youtube.