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Sunday December 29, 2013 MYT 12:00:00 AM
Sunday December 29, 2013 MYT 9:15:13 AM
by hong boon how
Driving force: Revised NAP must get it right if Malaysia hopes to re-establish itself as a regional automotive player.
AFTER losing its pole position to Thailand as the leading vehicle producer in the Asean region in the early 2000s, Malaysia has not been able to retake the crown despite several attempts in revitalising its automotive sector.
With the long-awaited revision of the National Automotive Policy (NAP) due to be unveiled on Jan 15, the local automotive industry is now on tenterhooks.
This is probably the final call for Malaysia to re-establish itself as a serious regional automotive player or risk slipping further down the ladder and even being overtaken by other emerging Asean countries which are more gung ho about their car industry.
Malaysia’s total industry volume of some 600,000 vehicles a year, pales against Thailand’s annual 1.4 million units, even though a significant portion of Thai vehicles is pick-up trucks.
Which is why the industry is also waiting to see the NAP’s stand on excise duty exemptions for hybrid and electric cars and motorcycles.
That full exemption, which expires on Dec 31, allowed the sale of hybrid models to soar.
Being an Energy Efficient Vehicle (EEV) hub should also mean policies that encourage the use of EEVs on the road.
Hence, auto players are hopeful there will be incentives under the revised NAP, especially for those involved in the local assembly of EEVs.
An industry observer said consumers stand to benefit from such policies in the revised NAP, when the spillover effects seep in.
“With a higher localisation of parts and such, cost would come down, and the public would eventually see a gradual reduction in car prices,” he said.
There’s no two ways about it, the revised NAP must address the weaknesses of the previous NAP and provide greater clarity, timelines and fair incentives for industry stakeholders if the Government is sincere in making the EEV hub a success.
More importantly, implementation should be done in earnest.
To quote a Bernama report in 2008, Deputy Prime Minister Tan Sri Muhyiddin Yassin who was then the International Trade and Industry Minister, remarked that:
“The NAP, introduced by the Government in March 2006, was biased towards protecting the local automotive industry and did not encourage the overall development of the industry.”
Muhyiddin went on to say that Malaysia had missed many opportunities because of the NAP as many potential investors had diverted their attention to other countries in the region.
In essence, automotive companies being multinational corporations are competitive by nature.
While many are used to certain lopsided provisions, they frown upon sudden changes in policies which throw their business strategies out of sync.
A chief executive officer of a foreign car maker once jested to this writer that: “In Thailand, the government changes but the policy remains the same. In Malaysia’s case, the policy changes although the Government stays the same.”
He might have said it in jest but he had made a point that is hard to laugh off.
Policy aside, poor implementation of the previous NAPs, including pandering to self-interest groups such as Approved Permit (AP) holders, has affected the industry.
Malaysia’s trained workforce in the automotive sector with good proficiency in English makes the country an attractive location for foreign car makers to set up local assembly.
The bewilderment comes in after car makers which had invested millions to set up local assembling facilities discover that their products will be competing against parallel imports which are cheaper due to APs and tax under-declaration.
The failure to implement the Euro 4M diesel fuel standard by 2011, promised under the NAP 2009 revision was another sore point among foreign car makers which had already made preparations to launch their clean diesel models in Malaysia.
At the moment, Malaysia’s diesel standard is still at an antiquated Euro 2M, while some European countries are preparing for the latest Euro 6.
I am told that Euro 4M diesel will be introduced by 2015, for which I will wait with bated breath.
If this happens, major car companies likes Mercedes-Benz, BMW, Peugeot and Citroen would not be wasting any time introducing their clean turbodiesel models which offer outstanding fuel-efficiency and performance.
For the man on the street, the thing that matters are not the billions of ringgit in investments that the NAP will bring in but whether the car he wants to buy will be cheaper, whether through competition brought by removal of protectionist policies or tax reduction as promised by the Government as part of a general election pledge.
Everyone treasures his personal mobility and the current sad state of affairs for public transportation network makes car ownership more necessary.
With the prices of goods and services already going up, it’s easy to understand why many motorists have resigned to the fact that cheaper cars are a thing of the past.
Let’s hope the revised NAP sets things right this time and proves them wrong. We have lost so much time dithering and we must stop the emasculation of our auto industry before it’s too late.
Here’s where a shot of political Viagra would really be a much needed boost.
> Hong Boon How is The Star’s acting motoring editor.
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