DRB-Hicom hopes for more incentives for auto industry

  • Business
  • Saturday, 08 Sep 2012

PETALING JAYA: Automotive giant DRB-HICOM BHD is wishing for more incentives for the automotive industry in the upcoming Budget 2013 to safeguard the industry and assist companies to be competitive on a global scale.

DRB-HICOM group managing director Datuk Seri Mohd Khamil Jamil told StarBizWeek that incentives for local manufacturers should be considered to allow relief where localisation and local R&D and manufacturing were undertaken.

“Since auto manufacturing involves many shop floor employees, the uncertainty of the minimum wage bill which will become effective next year raises many questions. The anticipated impact which we envisage will be a double digit impact on our income,” he said in an SMS.

Mohd Khamil said the relevant authorities needed to speed up the directions and regulations pertaining to the minimum wage to allow the many industry players to be prepared to absorb and mitigate the impact.

“Planning is very important as the auto industry is amongst the top four industry which employs circa three million people directly and indirectly in the country,” he said.

The DRB-Hicom chief said the nature of the auto business worldwide was cost down, quality up, hence, incentives for local manufacturers should be considered to allow relief where localisation and local research and development and manufacturing were undertaken.

“In the event products are manufactured for export, the Government could consider additional relief or incentives if it is designed, developed and produced locally. This will encourage and enhance local vendors and manufacturers to be price competitive and go global,” he said.

With road infrastructure getting saturated by the day, causing traffic congestions and impacting socio-environmental conditions, he said regulations should be in place for cars that reached a certain age limit to undergo mandatory vehicle inspection to ensure its road worthiness and safety as well as to reduce any negative contribution to the environment.

“End of life for aged vehicles should be considered but on a staggered basis and only after mandatory vehicle inspection has been in place.

“Public awareness programmes on the benefits and advantage of these initiatives must also be undertaken from now,” he said.

Commenting on the car parts repair and replacement market, he said there was a need to develop the market further. “The maintenance and service, as well as collision repairs and replacement market is a big market, but because of cost factor, many imitation and parts not from original equipment manufacturers (OEM) are being used. The authorities should look into regulations and process to curb and regulate the importation of sale of this replacement parts and components,” Mohd Kamil said.

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