Malaysian Automotive Council on the way

KUALA LUMPUR: The Malaysian Automotive Council (MAC) will be set up in two months' time to set a clear direction for the automotive industry, said International Trade and Industry Minister Datuk Seri Mustapa Mohamad (pix).
"The purpose of setting up this council is to provide a platform for policy makers to interact, so can have improvement for the industry and a clear direction as which we previously moved," he told reporters at a media briefing on an update on the National Automotive Policy (NAP).
Mustapa said he will be the chairman of the council, with other members from the government and business community.
"In the next couple of months, hopefully by the end of March, we'll have the first meeting for the Malaysian Automotive Council," he added.
The NAP, which was announced a year ago, is aimed at making Malaysia as an energy efficient vehicle (EEV) hub by 2020.
According to Mustapa, the local automotive industry contributes RM30 billion to the gross domestic product (GDP). A total of 666,465 vehicles were sold last year, a 1.6% increase compared with 655,793 the year before.
Investments amounted to RM11.5 billion were approved last year, translating into a new capacity of 332,000 units.
On car prices, Mustapa is confident of achieving an average reduction of 20% by end-2017 following a drop of 5% and 7% for 2014 and 2015 respectively.
"We are about 8% (reduction to achieve) before we get into 2017, that's in the Barisan Nasional Manisfesto," he said, adding that it would be a "bonus" if a 30% reduction target is achieved.
He noted that there will be an increase in the costs of CKD (completely knocked down) vehicles due to the weakening ringgit.
On another note, Malaysia Automotive Institute (MAI) CEO Madani Sahari said more EEV manufacturing licenses will be issued, not only for the new but also the existing automotive players.
Three EEV manufacturing licenses have been issued so far to Perodua, Honda and Go Automobile, while five other applications are being evaluated, of which he declined to disclose the applicants.
On tax exemption that will end in 2015 for hybrid CKD vehicles, Madani said it will then be based on customized incentive starting 2016.
"Customized incentive can also include tax exemption, depending on the merit of each business proposal," he added.
Meanwhile, asked of the Euro 4 fuel implementation, Mustapa said the Euro 4 for Ron 97 petrol will be introduced by the end of 2015, followed by Ron 95 in 2018.
He acknowledged that there has been a lag in the euro 4 implementation, mainly due to higher investments needed from the oil companies.
For Euro 5 diesel, it has been implemented at 12 fuel stations in Johor and it will be introduced to other states such as Selangor, Penang and the east cost states, according to Madani.
On another issue, Mustapa said the much debated approved permits (APs) issue is now at the finalisation stage and it will be announced soon.
"Study (on APs) is almost finalised, we'll present to the government," he said.
Prior to the NAP announcement, the government had set a target to abolish the open and franchise APs by end-2015 and end-2020 respectively.
However, no commitment was made by the government whether APs will be abolished, but saying the review of it has been on-going.
APs are used by importers to import reconditioned luxury cars to sell at slightly lower prices than locally assembled ones.