By Chan Quan Min
In a presentation yesterday, Minister of International Trade and Industry Mustapa Mohamed unveiled the third edition of the National Automotive Policy (NAP) in eight years.
Today, automotive industry stakeholders and analysts weigh in on the NAP. Some notable views and comments from a diversity of voices are presented below:
Aminar Rashid Salleh, Perodua president and CEO
On the new competitive environment:
“Yes, there will be challenges, there will be competition, but there will also be opportunities.
“The government has set some targets. Our aspiration is to be part of that target. Just at this point in time we are not as aggressive as we would like to be.”
On new models meeting energy efficient vehicle (EEV) standards:
“The new model that we are going to introduce sometime this year, we are trying our very best to meet as much as possible the EEV definition – and for future models.”
Lucius Chong, CIMB Research analyst
“After the 18-month delay, the National Auto Policy (NAP) 2014 was a disappointment. It did not contain an end-of-life vehicle (ELV) policy and extended the timeline to end the open approved permit (AP) system.
“Excise duties will not be cut and the projected 20-30% reduction in the average car prices over the next five years is already in motion, with Asean localisation and lower import duties.
“The most notable incentive is the tax and duty exemption for all CKD (completely knocked down) hybrid and electric vehicles, in line with the government’s aim of making Malaysia an energy efficient vehicle (EEV) production hub.”
On the assemblers who will benefit most from the new NAP:
“Honda Malaysia is likely to be an immediate beneficiary of NAP 2014 as it is ahead of the curve… we think that Honda will obtain the first EEV manufacturing licence and will be allowed to sell its CKD units exempt of all duties and taxes.
“Although DRB-Hicom will benefit from Honda’s EEV advantage, its 34% stake in Honda Malaysia will not offset Proton’s uncertainties following the NAP 2014. Proton’s fragile mid-range market share will be threatened by the EEV CKDs, while its bread-and-butter low-end products will not have the support of an ELV policy.”
Keith Schafer, Volvo Car Malaysia managing director
On automobile safety standards:
“I think we are going in the right direction, from my point of view. I would like to see emphasised even more, car safety on the roads. In a year, 7000 people are killed here on the roads; it’s a very very high figure. We should try to reduce it 50%.”
On excise duties:
“We have a lot of taxes here that we don’t have in other countries. I think this is actually affecting people’s’ opportunities to own a car.”
On whether the planned reduction in car prices is achievable:
“I think it’s going to be very tough. You have to keep in mind (excise duty) is actually cost for manufacturers. To have a viable business the costs need to come down.
“For prices to come down, costs need to come down, and for costs to come down you need to look at all parts in the value chain.”
Alexander Chia, RHB Research Institute head of research
“The announcement of the National Automotive Policy (NAP) was somewhat anti-climactic as the key policy thrusts had already been well-signalled to the market.
“The success of the policy will depend on whether the global OEMs are sufficiently convinced to begin making more significant investments in Malaysia.”
On his ‘neutral’ rating for the automotive sector:
“While the NAP is an important document that will get the ball rolling in setting the policy direction for the industry, we believe that the fruits from the NAP in terms of attracting FDIs from global OEMs, revitalising automotive exports and helping to engineer lower car prices will take time to realise.
“Meanwhile, the operating environment for automotive manufacturers in 2014 will remain challenging… we think the sector valuations are fair and see few catalysts to re-rate the sector higher.”
Aishah Ahmad, Malaysian Automotive Association president
On the new NAP attracting investment:
“For the first time, Malaysia is saying, ‘look, we are opening up our markets, you can come and invest.’ At least with the other Asean countries we now have something to offer.
“I’m sure there will be foreign investors that want to come to invest in Malaysia, especially those who have not invested yet in the other Asean countries.”
On similar energy efficient vehicle (EEV) incentive packages in Thailand and Indonesia:
“I think (Malaysia’s) is different, ours, we are talking about a whole spectrum of vehicles whereas Indonesia and Thailand is just a specific segment. But it’s a step in the right direction.”
On reducing car prices through competition:
“I think competition is the one driving car prices to come down. At the same time, it’s the efficiency of the car companies themselves – whether they can produce at lower cost. And from that, whatever savings can be passed on to the consumer.”
Gerhard Pils, BMW Group Malaysia CEO
“The widened definition of energy efficient vehicles (EEV) beyond technology specific criteria as well as engine size based criteria is a key step forward towards enhancing Malaysia’s automotive industry…
“We at BMW believe recognition of advanced green technology as an instrumental component of Malaysia’s future economic growth… into a truly viable hub for the assembly and manufacture of advanced automotive technology.
“Nevertheless, we believe that it is important for further transparency and discussions to be conducted between MAI (Malaysia Automotive Institute), MITI and the local automotive industry players to clarify what the actual exemptions to EEV vehicles assembled in Malaysia will be…
“As only from there will firm business decisions regarding the market be made. These discussions should be conducted swiftly and carefully to ensure that both the automakers as well as the public can benefit mutually from the new policies moving forward.”
You must be logged in to post a comment.