The exemption, granted during the Covid-19 lockdown period, ends on June 30.

About 80,000 cars are on order and awaiting delivery, according to Tony Khor, president of the Federation of Motor and Credit Companies Association of Malaysia.

“Many car buyers have yet to receive their orders, some have waited up to five months. If the cars are not handed over by the end of June, then about 80,000 of these car orders would be subject to the tax,” he said.

A full waiver of the tax is granted to locally-assembled cars and a 50% waiver on imported cars until June 30.

Some customers could cancel their orders if the new car price exceeds their budget and the loss of sales would affect the motor industry’s recovery, he told China Press.

The second-hand car market would also suffer a knock-on effect with fewer old cars being traded-in for new orders. He said more than 67% of those buying new cars tend to trade in their old ones.

Khor said the federation and other motor industry groups have called for SST exemption to be extended for a further six months.