Tony Khor, president of the Federation of Motor and Credit Companies Association of Malaysia, said extending the registration deadline but not the SST exemption would cause a booking spree that could be troublesome to dealers.

“We already have over 200,000 bookings and it won’t be easy for dealers to manage the demand in such a short period,” he said.

He was commenting on finance minister Tengku Zafrul Aziz’s statement that the SST exemption would not be extended beyond June 30 although buyers who had already ordered their vehicles by then would be allowed until March 31 to register them.

Khor said the government should consider basing the SST exemption on the registration date instead of the booking date.

However, he said he was happy with the additional nine months given for registration in view of a drop in car production caused by the global supply chain disruptions.

A full waiver of the tax is granted to locally assembled cars and a 50% waiver on imported cars until June 30, an initiative introduced by Putrajaya amid the Covid-19 lockdown.

Economist Geoffrey Williams of the Malaysia University of Science and Technology said the government made the right move in not extending the exemption.

“We are coming out of the Covid-19 pandemic and we should remove the special measures put in place to support various sectors during that policy-induced crisis,” he said, adding that it was fair that buyers were allowed time to register their vehicles.

He said there might be an increase in vehicle sales in the next 10 days, but predicted that things would normalise after that.

“There will be some volatility in sales but eventually this will smooth out,” he told FMT. “There are no long-term implications for the economy or the automotive sector.”