Malaysia Extends Duty Exemptions for Hybrids, EVs
Executive Summary
Malaysian auto makers would like to see the import- and excise-duty exemptions extended farther and applied to all hybrids and EVs, regardless of engine size.
The Malaysian government extends the full exemption of import and excise duties on hybrid and electric cars until Dec. 31, 2013.
Prime Minister Najib Razak, in his role as finance minister, says in his annual budget that the extension is meant to “promote green technology and ensure sustainable development” by encouraging domestic assembly of EVs and hybrids.
Razak also says the government will offer subsidies to taxi owners to replace older vehicles with new vehicles. Funding will be 3,000 ringgit ($960) for taxis aged seven to 10 years and MYR1,000 ($320) for cabs 10 years and older.
The 2-year program starts Jan. 1 and the replacement vehicle must be locally made.
“The government is concerned with the plight of individual budget-taxi owners arising from increasing operating costs,” Razak says in his budget speech.
“Furthermore, most taxis have exceeded their economic life.”
There will be a 100% exemption on excise duties and sales taxes on purchases of new locally made taxis. The government also will also provide an interest-rate subsidy of 2% on a full loan for such purchases.
Kavan Mukhtyar, Frost & Sullivan automotive partner and transportation practice head for Asia/Pacific, says the duty exemptions will encourage other auto makers to launch hybrids in Malaysia.
“This will drive robust growth in the hybrid market over the next few years,” he tells the Star. “We expect hybrid volumes to exceed 10,000 units by 2013.”
The newspaper cites Malaysian Automotive Assn. statistics showing Toyota Malaysia sold 1,301 Prius hybrids in the first eight months of this year, up from 162 in like-2010.
Sales would have been higher if not for supply-chain disruptions following the March earthquake and tsunami in Japan.
Honda Malaysia Managing Director and CEO Yoichiro Ueno says the duty-exemption extension is timely. The auto maker is “looking at expanding its hybrid-vehicle lineup in Malaysia by year’s end,” he says.
But the MAA says some industry players are disappointed the exemption is for only two years and only for vehicles with engines no larger than 2.0L.
“We did request that it be extended until 2015 to help promote future investments,” association president Aishah Ahmad says. “However, 2013 is a step in the right direction.”
Aishah says the association also has asked the government to extend the duty exemption to all EVs and hybrids, regardless of engine size.
