Minimum price, export requirements are set not to deter new car brands, but to grow local vendors – MITI

Much has been said recently about the ministry of international trade and investment’s (MITI) recent statements regarding the country’s automotive policies, including that on a minimum price for fully-imported CBU EVs as well as defined requirements for manufacturing licences, which some have argued limits the entry of new players as well as the scope of investment and growth for the sector.

The ministry has explained the reasons behind this, stating that the point behind a minimum price for fully-imported electric vehicles coming in after July 1 is to steer things towards local assembly, effectively developing the local automotive ecosystem, including the supply chain, through CKD operations.

This also aligns with the path for new manufacturing licences and the conditions listed for it, as explained in the ministry’s statement in March when it addressed the topic of BYD’s planned CKD factory.

Designed to ensure that local assembly capacity moves towards sustainable, higher-end value segments and to avoid the displacement of the established local vendor ecosystem, these salient points were reiterated by MITI minister Datuk Seri Johari Abdul Ghani again today during the launch of the MCE Auto Hub in Serendah, Selangor.

“When we set parameters such as domestic sales thresholds or minimum pricing structures, the intention is not to deter investors. Rather, it is to create a predictable and stable market environment in which local vendors can grow, while foreign investors also have a clear and sustainable path to profitability,” he said in his speech.

“At the same time, we are clear about the conditions attached to new manufacturing licenses. Technology transfer, supplier development, skill creation, and export capabilities are not a barrier to investment. Instead, they are the foundation of genuine industrial partnership,” he explained.

He added that while vehicle exports would help fuel that growth, Malaysia should not seek to compete on volume alone on a broader regional context. “We must seek and build our comparative advantage in higher value-added segments, particularly in order for us to become the ASEAN hub for automotive intelligence,” he said.

“This includes finding our niche in automotive electronics, semiconductor integration, and complex mechatronics—industries that generate higher wages, deeper technological capability, and long-term economic resilience,” he added.

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