Green Cars Key to Revised Malaysia Automotive Policy

Malaysia’s much-awaited revision of its National Automotive Policy will be announced Jan 15.

International Trade and Industry Minister Mustapa Mohamed provides the date after delivering the keynote address at the fourth Kuala Lumpur International Automotive Conference.

The policy, now in the final stage of drafting, is expected to offer incentives intended to make Malaysia a hub for energy-efficient vehicles.

“We hope the Cabinet can approve the policy by year-end,” Mustapa is quoted as saying by the government news agency Bernama. “But that is not a good time to launch a major policy. We’re going to announce it probably in mid-January.”

The policy is being revised for the first time since 2006.

Mustapa says the auto industry is important to the Malaysian economy and the government wants to ensure whatever is done promotes its development.

Keys to the automotive policy, he says, will be competitiveness and energy efficiency.

Aishah Ahmad, president of the Malaysian Automotive Assn., tells Bernama she expects the revised policy to include long-term provisions that could attract foreign investors.

Sources tell the Business Times the revised policy may not extend the exemption on import and excise duties on fully imported hybrid vehicles. Locally assembled hybrid vehicles would continue to enjoy tax breaks.

Malaysia Automotive Institute CEO Madani Sahari says to make the country a hub of  energy-efficient vehicle production, it only makes sense for hybrid vehicles to be built locally.

“Part of the NAP's focus will be on making Malaysia an EEV hub by 2020, which will transform the sector into a green ecosystem encompassing products, processes and standards,” he tells the newspaper.

The Proton Edar Dealers Association Malaysia wants the policy to include compulsory annual roadworthiness inspection for vehicles more than 10 years old. Association President Armin Baniaz Pahamin says this will ensure the safety of vehicles on the road.

“We also hope that there will be proper phase-by-phase implementation of the end-of-life vehicle (ELV) policy,” he tells The Star newspaper. “Without ELV, Malaysia would not be able to sustain new-car registration total industry volume in the future, which will affect employment and future investment into the automotive industry.”

Armin also wants the policy to address the status of national automakers Perodua and DRB-Hicom’s wholly owned Proton unit.

“Currently there is no clear direction on where our national carmakers are heading,” he says. “There is also a need to redefine the classification of what a national car is, and those that do not qualify should not get the incentives from the government. Policies for national carmakers should be differentiated with non-national cars, and these policies are needed to make the former more competitive.”