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January 21, 2014

NAP 2014 aims to turn Malaysia into EEV hub

BY THOMAS HUONG AND HONG BOON HOW

KUALA LUMPUR: Car buyers can expect lower prices within the next five years, under a CPR (Car Price Reduction) framework developed by the Government.

“The framework consists of mixed measures. The underlying factor is liberalisation of the local automotive industry, which will enable market forces to determine more competitive car prices,” said International Trade and Industry Minister Datuk Seri Mustapa Mohamed during the unveiling of the National Automotive Policy (NAP) 2014 at Menara Matrade here yesterday.

He also said Malaysians could expect more competitive prices for certain new cars this year.

“These new models and variants are forecast to capture 55% of market share. So, more than half of Malaysian car buyers can enjoy more competitive car prices,” he said.

Mustapa pointed out that last year, eight car models and variants launched by Proton, Perodua, Nissan and Honda saw price reductions ranging from 3% to 17%.
“These models with reduced price tags accounted for 30% of market share last year,” he said.

All ears: Reporters listening intently as Mustapa announces the National Automotive Policy 2014.
According to Mustapa, the Go­vernment is open to the possibility of reducing excise duties on car, when the fiscal situation permits.

He also said NAP 2014 aims to turn Malaysia into an energy efficient vehicle (EEV) hub in Asean where the local production of hybrids and electric vehicles would be promoted.

To support this move, import tax and excise duty exemption for electric cars and hybrid vehicles with engine capacity below 2,000cc which ended on Dec 31 last year, will no longer be extended.

Exemption will only be allowed for locally assembled hybrids until Dec 31, 2015 and locally assembled electric cars until Dec 31, 2017.

Mustapa also said under NAP 2014, new vehicle manufacturing licences can be given for the production of EEVs.

Other NAP 2014 objectives are to promote a competitive and sustainable domestic automotive industry, increase in exports of vehicles and automotive components, the participation of bumiputra companies, and safeguard consumer’s interests by offering safer and better quality products at competitive prices.

With the revised policy, it is expected that 150,000 more employment opportunities will be created and local workers will replace 80% of foreign workers in the automotive manufacturing sector by 2020.

Also provided are customised incentives such as pioneer status as well as soft loans amounting to RM1.89bil and grants worth RM175mil have been allocated for foreign and domestic investors.

The soft loans are also available for investors in the local production of EEVs, which are defined by vehicle kerb weight and fuel efficiency.

Regarding the issue of Approved Permits (AP), Mustapa said an in-depth study will be done to assess the impact of its proposed termination.

Under NAP 2009, it was specified that open APs and franchised APs would be terminated by end-2015 and end-2020 respectively.

“We need to do this study. We have to take the views of automotive industry stakeholders including bumiputra participants and the impact of the AP termination,” he said.

- The Star

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