New vehicle sales in Malaysia rebounded by 28.3% to 64,502 units in June from 50,273 units in the same month of last year, according to registration data released by the Malaysian Automotive Association (MAA).

Month on month, sales jumped by over 50% from May's 42,983 units as buyers rushed back into the market after the 6% goods and service tax (GST), introduced just three years ago by the previous government, was scrapped at the beginning of June.

Cumulative sales turned positive in June, with first half registrations up by 1.8% to 289,714 units compared with 284,453 units a year earlier. Sales of passenger cars increased by 2.1% to 261,043 units in this period, while commercial vehicle sales were down slightly - 0.1% - at 28,671 units.

Strong sales are expected to continue in the next two months while the tax holiday lasts, before the old Sales and Services Tax (SST) is reintroduced on 1 September.

The government has indicated that the under the SST system, goods will be taxed at 10% and services at 6%, which means a tax hike for vehicles.

The MAA has pared back its full year market forecast to 585,000 units from 590,000 earlier in the year to reflect weaker sales from September once the higher SST is applied.

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