KUALA LUMPUR, Jan 21 ― The National Automotive Policy (NAP) 2014 could lead to better and cheaper cars here over the next five years, industry experts said yesterday, as the country gears up to become a regional hub for energy efficient vehicles (EEV).
Malaysia Automotive Institute chief executive Madani Sahari said consumers will be the ultimate beneficiaries of the government’s push towards high technology in vehicle manufacturing, adding that greater economies of scale will lead to reduced cost.
“They will definitely benefit. From a price point, from the aspect of safety... they will have more choices in the market,” he said when contacted by The Malay Mail Online.
“At the same time, as we move into EEV, we move towards cars that are more integrated, more sophisticated with all those electrical gadgets and systems already imbedded in the car.
“This is an exciting phase for the Malaysian automotive industry, as there is now much, much less preferential treatment. Everything is now at a more level playing field,” he said, adding that this will go in tandem with the government’s pledge to gradually reduce car prices by 30 per cent over the next five years.
Yesterday, Putrajaya unveiled a series of new incentives to draw more foreign and domestic producers of EEVs and hybrid cars in its bid to restore Malaysia’s status as Southeast Asia’s automotive hub.
International Trade and Industry Minister Datuk Seri Mustapa Mohamed said the plan involves removing investment and equity conditions for manufacturing licences, along with no specific requirement on the volume of EEV units produced by carmakers.
Madani said the EEV push is a major step forward for the local automotive industry, as this is the first time it is being opened up significantly to newcomers across a broad spectrum of vehicle segments.
He stressed, however, that this is the only viable direction for the local industry, as imports will continue to eat up more of the market share if the country opted to maintain the status quo.
“It’s good to have competition. It provides economy of scale, which resolves one big issue in Malaysia which is production volume... it generally benefits the industry,” he said.
Malaysian Automotive Association president Datuk Aishah Ahmad said there is little excuse for local players to fall behind new carmakers in the market, as it is simply a matter of shifting their direction to match the government’s latest policies.
“If the latest policy is EEV, then local players must also look at producing EEVs. After all, it is in terms of fuel consumption only,” she said when contacted.
“It can be a mix of petrol and electric or any combination of fuels. It’s just a matter of adopting technology that already exists... if this is the policy, make sure you remain competitive,” she added.
Aishah, who is also director of corporate affairs for Sime Darby Motors, noted that the entire framework of the new NAP is geared towards reducing costs for carmakers with the government’s willingness to slash taxes to encourage more local assembly.
“The government is talking about customised incentives on duties and taxes, and with this the price of EEVs will go down.
“What is good is they (government) made it official. It’s going to be a long-term policy, and for the first time the government is opening up the market... I’m hoping foreign investors will come in and take the bait,” she said.
Under NAP 2014, Malaysia is offering RM2 billion in financial aid for EEV manufacturers over the next six years, with RM 1.89 billion as soft loan and RM175 million in grants for human capital and Bumiputera development.
Mustapa said at the unveiling of the new policy that Putrajaya aims to add 150,000 jobs in the automotive sector by 2020, as well as ramp up the export of passenger cars from around 20,000 units last year to 250,000 units in six years’ time.
The minister noted that the government was in talks with a few car manufacturers over the new EEV scheme but declined to name them, later saying that it was aiming at pulling in three to four companies by 2018.
