AI Summary
The upcoming Sales and Service Tax (SST) expansion, effective July 1, is predicted to have minimal direct impact on Malaysia's automotive sector. Vehicle sales tax and service tax for maintenance and repairs remain unchanged. While dealership rental costs might slightly increase, the overall financial impact is expected to be negligible. However, weaker consumer sentiment and the potential removal of the RON 95 petrol subsidy could negatively affect new vehicle sales in the second half of 2025. Demand for vehicles under RM100,000 is expected to remain strong, driven by national brands. The removal of fuel subsidies could also boost electric vehicle (EV) adoption, especially with the anticipated end of import duty exemptions for EVs in December 2025.
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