The road to making Malaysia a regional automotive hub for energy efficient vehicles (EEV) will be kicked off by giving out manufacturing licences for EEVs without any restrictions, a one up on markets such as Thailand and Indonesia that has restrictions on investment and production units for eco cars.
International Trade and Industry Minister Datuk Seri Mustapa Mohamed said the government hopes to approve three to four manufacturing licenses for EEVs by 2018.
Manufacturing licenses for vehicles with a capacity of 1.8 litres and below were previously frozen.
EEV is defined as vehicles that meet a set of specifications in terms of carbon emission level and fuel consumption. EEV includes fuel-efficient vehicles, hybrid, electric vehicle and alternatively fuelled vehicles such as compressed natural gas (CNG), liquefied petroleum gas (LPG), biodiesel, ethanol, hydrogen and fuel cell.
Based on this vision, about 85% of vehicles produced in Malaysia in 2020 will be EEVs.
Mustapa said there will be no conditions on investment, equity, minimum production units whatsoever and grants and soft loans to the tune of RM2 billion will be given out for EEVs.
The NAP 2014 will also provide customised incentives for both foreign direct investment and domestic direct investment such as pioneer status and investment tax allowance; grants for research and development and training; infrastructure facilitation; lower taxes and expatriates.
For safety, there will be gradual compliance to Whole Vehicle Type Approval.
Meanwhile, the exemption of excise duties and import taxes for hybrids and electric vehicles (EV) will be extended for models that are assembled in Malaysia. The exemption will be extended until Dec 31, 2015 for hybrids and Dec 31, 2017 for EV.
Beyond these dates, the exemptions will be determined based on the strategic value of these CKD assembly investments.
Mustapa said the import and excise duties on CBU hybrid and electric vehicles will be discontinued.
“Although hybrid and EVs are good for the country in terms of carbon emission, in terms of linkages to the local economy, it does not bring too many benefits, because there is no local production and local assembly,” he said.
For now, EEV implementation will be based on standard fuel that is more efficient, while standard for carbon emission will be used when the Euro 4M petrol and diesel is introduced.
A thorough study on the implementation of Euro 4M is being conducted in consultation with industry players and related government agencies.
The move to make Malaysia an EEV hub encompasses strategies and measures to strengthen the entire value chain of the automotive industry and will also lead to environment conservation, high-income job creation, transfer of technology and create new economic opportunities for local companies.
Source : The Sun Daily | January 21, 2014