kuala lumpur: The proposal to include lemon law under the Consumer Protection Act 1999 will protect buyers from purchasing defective vehicles and enhance market confidence.
RHB Investment Bank Bhd said the development could encourage consumers to consider new automotive brands.
Proton and Perodua are well positioned to comply with the new requirements due to their scale, aftersales network and quality systems.
The investment bank views the move as structurally positive for the sector as it improves transparency and raises industry standards.
Prime Minister Datuk Seri Anwar Ibrahim announced the lemon law amendment during the Budget 2026 presentation last Friday.
RHB Investment Bank has maintained its neutral rating for the automotive sector due to overall industry volume volume expectations being weak.
Sales volumes are normalizing in the second half while competition in the non-national segment has intensified.
The Bank does not anticipate any near-term re-rating catalysts to lift total industry volume sales to record highs.
Meanwhile, Kenanga Investment Bank saw the removal of excise duty exemption on fully manufactured electric vehicles as a positive for national brands.
National brands already have high localization rates and benefit from additional government discounts on national car purchases.
Imported fully manufactured electric vehicle duties will increase between 30% to 100% from January 1, 2026.
This includes import tax of 10% to 30% of the car price and excise duty of 50% to 100%.
With luxury vehicle tax exemption limits in Langkawi and Labuan, this could inspire further purchases.
Kenanga targets total industry volume sales of more than 800,000 units for this year.
The lack of clarity on new excise duty rules for locally assembled vehicles is also expected to dampen further buying interest.
The new excise duty rules may result in a 10% to 30% increase in prices of locally assembled vehicles from January 1, 2026. – Bernama
