Malaysia Tightens Rules for New Carmakers, Including Chinese Brands

Malaysia has set clear rules for new carmakers entering its market. The Ministry of Investment, Trade and Industry (Miti) applies the same conditions to all manufacturers, including Chinese brands. Recent licences granted to BYD and Chery highlight the country's consistent approach to foreign investment in the automotive sector. Miti issued an interim Manufacturing Licence to BYD on 29 September 2025. The company must follow two key conditions: a yearly domestic sales cap of 10,000 units and a minimum on-the-road (OTR) price of RM100,000 for locally assembled (CKD) vehicles. These limits align with 20% of BYD's total projected production capacity.

Earlier, on 26 June 2025, Chery Automobile Co Ltd also received a Manufacturing Licence. Despite these approvals, no Chinese carmaker had officially secured a local production licence in Malaysia by the end of 2025. Miti's policies have remained unchanged since September 2025. The ministry emphasises development over protectionism, ensuring equal treatment for all 34 foreign automotive brands operating in the country. Of these, 14 are Chinese, reflecting Malaysia's openness to investment from the region.

The conditions for BYD and other new entrants reflect Miti's standardised framework. All carmakers face identical requirements when setting up operations in Malaysia. The rules aim to balance market growth with structured investment in the local automotive industry.