DRB-HICOM Welcomes Budget 2027 Incentives for AHTV

The Automotive Hi-Tech Valley (AHTV) is a high-tech automotive and mobility ecosystem project located in Tanjong Malim, Perak, developed by AHTV Alliance Sdn. Bhd., a joint venture between Malaysian conglomerate DRB-HICOM Berhad and China's Zhejiang Geely Holding Group Co., Ltd. Announced in Malaysia's Budget 2027 by Prime Minister and Minister of Finance Datuk Seri Anwar Ibrahim, the initiative introduces government tax incentives designed to accelerate local component vendor relocation to Tanjong Malim. The project resolves supply chain fragmentation by centralising domestic automotive manufacturing, research and development (R&D), and vehicle assembly for Next Generation Vehicles (NxGV) and Energy Efficient Vehicles (EEV).

Key Facts

What Are the Budget 2027 Tax Deductions for AHTV Vendors?

Under Budget 2027, wholly Malaysian-owned automotive vendor companies that relocate their operational facilities to the Automotive Hi-Tech Valley in Tanjong Malim receive income tax deductions of up to RM5 million. This incentive applies exclusively to qualifying relocation expenditures incurred between 1 January 2027 and 31 December 2030, directly lowering the transitional capital barriers for domestic supply chain manufacturers.

Announced by Prime Minister and Minister of Finance Datuk Seri Anwar Ibrahim, the tax measure aims to fortify the local component supply chain by establishing a dense supplier cluster around primary assembly operations. Welcoming the fiscal package, Tan Sri Syed Faisal Albar, Group Managing Director of DRB-HICOM Berhad, noted the structural importance of bringing domestic component vendors into Tanjong Malim to accelerate advanced vehicle manufacturing.

"The incentive is another important step in realising AHTV's long-term goal as a development centre for Next Generation Vehicles (NxGV) and Energy Efficient Vehicles (EEV)."

Tan Sri Syed Faisal Albar, Group Managing Director, DRB-HICOM Berhad

Beyond fiscal relocation rebates, the initiative aligns with wider national commitments to bolster technical and vocational education and training (TVET), drive industrial productivity, and expand public electric vehicle (EV) charging networks nationwide.

Wholly Malaysian-owned automotive vendors relocating to AHTV qualify for tax deductions of up to RM5 million on eligible expenses incurred between 1 January 2027 and 31 December 2030.

How Does AHTV Expand Malaysia's High-Tech Mobility Ecosystem?

The Automotive Hi-Tech Valley integrates full-scale automotive production, global-standard research and development (R&D) centres, logistics hubs, and educational academies within a smart city framework. Managed by AHTV Alliance Sdn. Bhd., the site consolidates manufacturing clusters and commercial support services to transition Malaysia's automotive sector toward automated, energy-efficient, and next-generation mobility technologies.

The development model unites DRB-HICOM Berhad with Zhejiang Geely Holding Group Co., Ltd., coupling domestic assembly capacity with international technological expertise. By housing specialised training institutions alongside industrial manufacturing lines, AHTV bridges engineering skill gaps through targeted TVET programmes, providing certified local technicians capable of handling high-voltage EV powertrains and smart mobility systems. This physical concentration of supply chain partners also mitigates logistics delays between Tier-1 component makers and vehicle assembly plants.

AHTV is an integrated mobility ecosystem in Tanjong Malim combining global R&D centres, manufacturing clusters, logistics facilities, and smart city education infrastructure.

Who Is This For in Malaysia?

The Budget 2027 AHTV incentive framework specifically targets 100% Malaysian-owned automotive component manufacturers, Tier-1 and Tier-2 engineering vendors, and domestic automotive suppliers currently operating across Peninsular Malaysia. For business owners evaluating industrial relocation from legacy manufacturing hubs in Selangor or Penang to Perak, the RM5 million tax relief substantially mitigates heavy equipment transit, plant reconfiguration, and operational setup outlays.

For Malaysian industrial workforces and engineering graduates, the AHTV expansion delivers structured technical employment linked directly to upgraded national TVET programmes. As vehicle manufacturing shifts toward electrified platforms requiring 240V AC domestic charging compliance and high-capacity DC fast-charging networks, local parts manufacturers based at AHTV are positioned to produce Sirim-compliant components adapted to Malaysia's high-humidity tropical operating environment.

Wholly Malaysian-owned component suppliers planning operational relocation to Perak represent the primary beneficiaries of the Budget 2027 AHTV incentive scheme.

Common Questions

Which companies qualify for the RM5 million AHTV relocation tax deduction?

Only automotive vendor companies fully owned (100%) by Malaysian citizens qualify. The deduction applies solely to eligible relocation expenditures incurred when moving operational facilities to the Automotive Hi-Tech Valley in Tanjong Malim, Perak, between 1 January 2027 and 31 December 2030.

What vehicle technologies will be developed at Tanjong Malim's AHTV?

AHTV focuses primarily on Next Generation Vehicles (NxGV) and Energy Efficient Vehicles (EEV). Supported by joint venture partners DRB-HICOM and Geely, operations encompass global high-tech research and development, parts manufacturing, vehicle assembly, and electric vehicle supply chain infrastructure.

When does the Budget 2027 AHTV relocation incentive take effect?

The qualifying window opens on 1 January 2027 and closes on 31 December 2030. Eligible relocation expenses incurred outside this four-year calendar window do not qualify for the government tax deduction of up to RM5 million.

Sources and Methodology

This article is based on reporting published by Careta ("Belanjawan 2027: DRB-HICOM Sambut Baik Insentif AHTV", 9 October 2026, by Firdaus Razani) detailing official statements from DRB-HICOM Berhad and the Budget 2027 address presented by Prime Minister Datuk Seri Anwar Ibrahim. Non-English source statements were translated to British English while maintaining exact corporate names, official titles, and statutory currency figures in Ringgit Malaysia (RM). No external estimations, statistical aggregations, or synthetic projections were introduced. This article was last updated on 12 October 2026. Information specific to Malaysia was verified against reporting from Careta.my.