Malaysia: Hybrid and EV industry anticipates National Automotive Policy update

With Malaysia’s exemption of import and excise duties on hybrid and electric cars expiring at the end of this year, a National Automotive Policy update is widely expected, and industry experts are predicting that a New Policy Could Make Malaysia The Next Big EV Market.

The infrastructure of Malaysia is one of the most developed in Asia and it has had one of the best economic records in the region, with GDP growing an average 6.5 per cent annually, making it the third largest economy in ASEAN and the 29th largest in the world. The country has shifted towards an industrial/manufacturing based economy and aims to attain developed country status in 2018 – most economists agree that it has all the right ingredients to achieve that.

Automotive manufacturing is a key part of Malaysia’s economic development plans, and in particular the manufacture and development of low emissions vehicles that will also help it to realise it’s COP15 commitment to reduce its CO2 emission’s to 40 per cent by the year 2020.

According to regional press: Datuk Takashi Hibi, Deputy Chairman of UMW Toyota Motor Sdn Bhd, says [Toyota] are considering the possibility of assembling hybrid vehicles in Malaysia – The company planned to introduce the Toyota Camry Hybrid as the new completely knocked down (CKD) model to be assembled locally – but the final decision will depend on the incentives given by the authorities: whether the company will introduce it or not will depend on the incentives in the revised National Automotive Policy, expected to be announced soon.

The Malaysian Automotive Association (MAA) are hoping to see the tax incentives given to hybrid cars extended beyond the current deadline – the hybrid car segment has seen significant growth as a result of the scheme, led by Toyota and Honda – the MAA are lobbying the government on behalf of the industry, and clearly Toyota are applying pressure of their own.

According to the Malaysian Business Times, the revised National Automotive Policy (NAP) is expected to be unveiled by the middle of next month. The industry roadmap will boast incentives for players that will make Malaysia a hub for energy efficient vehicles (EEV).

“The revised NAP will be announced in two or three weeks, after Prime Minister Datuk Seri Najib Razak presents the 2014 Budget in Parliament on October 25,” said an industry source.

Another source said under the blueprint, the government may not extend the exemption on import and excise duties on fully imported hybrid vehicles. However, locally assembled hybrid vehicles would continue to enjoy tax breaks, said the official.

Malaysian Automotive Association president Datuk Aishah Ahmad does not expect the revised NAP to veer much from what industry players are anticipating. They had earlier said the blueprint would focus on, among others, new market openings and an end-of-life policy for old vehicles.

Malaysia Automotive Institute chief executive officer Madani Sahari said to make Malaysia an EEV hub, it only makes sense for hybrid vehicles to be assembled 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.

“In our bid to make green products, the car has to be light and safe. To do that, you have to use green composites that adhere to certain standards,” Madani said.

In related news: a UK automotive industry body are organising a trade mission to Malaysia: The Institute of the Motoring Industry (IMI) have embarked on a mission to Malaysia this month to meet with key automotive organisations and share how vocational training and accreditation can positively influence Malaysia’s automotive industry – from manufacturing and assembly through to retail and servicing.

As well as meeting with major auto manufacturers, they also have a meeting with the Malaysian Ministry of Education to discuss plans to support the Ministry’s Hybrid / Electric training.

“Malaysia’s retail motor industry has significant potential to grow and contribute to the country’s overall automotive industry if it stays in step with the government’s call to upgrade the skills and capabilities of the existing workforce”, said Steve Nash, CEO of the IMI. “Considering Malaysia’s rapid economic development and high purchasing power, there is a huge potential for growth especially in the after-sales sector as consumers need assistance to maintain the use of their purchases. We have been working with our partners in the country for a number of years and look forward to meeting with some of Malaysia’s key automotive employers on this forthcoming trip.”

The mission will encompass meetings with some of Malaysia’s key automotive employers, including Dato’ Samson CEO of Nasim Sdn Bhd, Peugeot distributor for the region; and Dato’ Ben Yeoh, CEO of Bermaz, the key Mazda Distributor.

“Malaysia’s automotive industry has a strong existing workforce and has the talent to grow by leaps and bounds” concluded Steve Nash. “As the government works to prepare the next generation for an increasingly competitive workplace, it is up to the private sector to maintain, if not raise the bar. By helping employees upgrade their skills and capabilities, Malaysia’s retail motor industry stands to gain from an empowered workforce that is internationally recognised”

Regional news:

UMW assembly of Camry Hybrid in M’sia depends on NAP incentives

Malaysian Automotive Association lobbying gov’t for Euro 4 fuel, hybrid tax incentive extension

Toyota Camry Hybrid – local assembly being mulled

Revised NAP hitting the road in Nov?

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