The 18 new policies and measures covering licensing, duties, incentives, technology and environment, safety and standards and approved permits (AP) introduced under the National Automotive Policy (NAP) Review announced by Minister of International Trade and Industry Malaysia, Dato’ Mustapa Mohamed, on Wednesday are as follows.

1 - MANUFACTURING LICENCE (ML)

• The freeze on issuance of new ML will be lifted for selected segments like:
• luxury passenger vehicles with engine capacity of 1,800cc and above, and on the road price of not less than RM150,000;
• hybrid and electric vehicles;
• pick-up trucks;
• commercial vehicles; and,
• motorcycles with engine capacity of 200c.c and above.
• No equity condition imposed in new ML.
• Maintain current policy on contract assembly to utilise existing excess capacity.

2 - MAINTAIN FREEZE ON MANUFACTURING LICENCE FOR RECONDITIONING AND REASSEMBLING (REBUILT) ACTIVITIES

• The freeze on ML for rebuilt activities is maintained.

3 - DUTY/TAX

• The current rates of import duty and excise duty are maintained.
• The current import duty for completely build up (CBU) and completely-knocked down (CKD) vehicles are:
• MOST FAVOURED NATION (MFN)
• CBU: 30 pct (motor vehicles);
• CKD: 10 pct (motor vehicles);
• CBU: 30 pct (motorcycles); and,
• CKD: 0-10 pct (motorcycles).
• ASEAN FREE TRADE AREA (AFTA)
• CBU: 5 pct (both motor vehicles and motorcycle)
(Effective 1.1.2010 - 0 pct for CBU)
• CKD: Nil
• The current excise duty for CBU and CKD vehicles based on engine capacity are:
• Passenger cars: 75-105 pct;
• MPV/van: 60-105 pct;
• 4WD: 65-105 pct; and,
• Motorcycles: 20-30 pct.


4 - GRADUAL REMOVAL/REDUCTION OF IMPORT DUTY TO MEET AFTA/FTA COMMITMENTS

• Malaysia will continue to implement its commitments under Association of South-East Asian Nations and other existing and new free trade agreements (FTs).
• Import duty reduction/abolishment is implemented as agreed under respective FTAs.
• Details on duty structure available can be obtained at Ministry of International Trade and Industry website, www.miti.gov.my
• Current Status:
• Import duty for CBU and CKD vehicles are:
• MFN
• CBU: 30 pct (motor vehicles);
• CKD: 10 pct (motor vehicles);
• CBU: 30 pct (motorcycles); and,
• CKD: 0-10 pct (motorcycles).
• AFTA
• CBU: 5 pct (both motor vehicles and motorcycle)
(Effective 1.1.2010 - 0 pct for CBU)
• CKD: Nil


5 - TAX EXEMPTION ON VALUE OF INCREASED EXPORTS OF VEHICLES AND PARTS/COMPONENTS

• Increase exemption on statutory income:
• From 10 pct to 30 pct for goods that attain at least 30 pct value-added.
• From 15 pct to 50 pct for goods that attain at least 50 pct value-added.

6 - GAZETTE PRICE OF IMPORTED USED VEHICLES TO ADDRESS UNDER DECLARATION

• Establishment of gazetted price for imported used CBU motor vehicles.


7 - BETTER INCENTIVES FOR CRITICAL AND HIGH VALUE-ADDED PARTS/COMPONENTS PRODUCTION

• 100 pct pioneer status (PS) for 10 years; OR
• 100 pct investment tax allowance (ITA) for 5 years
• For the manufacturing of the following products
• transmission system;
• brake system;
• airbag system; and,
• steering system.


8 - PROMOTE HYBRID/ELECTRIC VEHICLES AND DEVELOPMENT OF RELATED INFRASTRUCTURE

• Incentives to local assemblers/manufacturers of hybrid/electric vehicles
• 100 pct ITA or PS for a period of 10 years;
• customised training and R&D grants in addition to existing grants;
• exemption of 50 pct on excise duty for locally assembled/manufactured vehicles or provision of grant under Industrial Adjustment Fund (IAF); and,
• 100 pct PS for 10 years or 100 pct ITA for 5 years for manufacture of selected critical components supporting hybrid/electric vehicles.
• Additional attractive customised incentives will be considered based on proposed activities.
• The Ministry of Energy, Green Technology and Water will draw up roadmap to develop infrastructure for electric vehicles.


9 - MEASURES TO MITIGATE IMPACT OF MARKET LIBERALISATION
• Automotive Development Fund (ADF) established under Ninth Malaysian Plan (9MP) to improve competitiveness of parts and component manufacturers through soft loans and grants will be continued.
• Under Industrial Adjustment Fund (IAF), grants have been made available to companies that create significant economic contribution also will be continued.


10 - FULL IMPLEMENTATION OF VEHICLE TYPE APPROVAL (VTA)

• Ministry of Transport will accord priority under 10MP to establish VTA standards and testing facilities.


11 - GRADUAL INTRODUCTION AND ENFORCEMENT OF MANDATORY STANDARDS FOR PARTS/COMPONENTS

• Ministry of Science, Technology and Innovation will coordinate and immediately formulate roadmap on enforcement of mandatory standards for automotive products.


12 - GRADUAL PHASE-OUT OF IMPORTED USED PARTS/COMPONENTS

• Government will introduce a mechanism to prohibit imports of used parts/components effective from June 2011.


13 - GRADUAL PHASE-OUT OF IMPORTED USED COMMERCIAL VEHICLES

• Imports of used commercial vehicles will be prohibited effective from Jan 1, 2016 in line:
• gradual phase-out of imports of used parts/components; and,
• termination of AP system for used passenger vehicles.


14 - CLEAR ROADMAP ON IMPLEMENTATION OF FUEL STANDARDS

• The Government will implement EURO 4M standards by 2011.
• The Ministry of Natural Resources and Environment will establish clear roadmap for fuel standards and quality.

15 - GRADUAL INTRODUCTION OF VEHICLE END OF LIFE POLICY

• Introduction of mandatory annual comprehensive inspection as requirement for road tax renewal for vehicles aged 15 years or older.
• This is an initial measure towards implementation of the vehicle end life policy.
• The Ministry of Transport will formulate a roadmap to implement the vehicle end life policy.


16 - TERMINATION OF AP SYSTEM FOR IMPORTS OF CBU VEHICLES

• Open AP for used vehicles (commercial, passenger and motorcycles) will be terminated by 31 December 2015;
• Importation of used vehicles is not allowed after 2015;
• No new applications for Open AP will be considered; and,
• Franchise AP will be terminated by 31 December 2020.


17 - ESTABLISHMENT OF FUND FOR BUMIPUTERA DEVELOPMENT

• A charge of RM10,000 for each unit of Open AP issued will be introduced.
• A fund will be established to assist Bumiputera companies venturing into automotive and other businesses.
18 - ESTABLISHMENT OF STRATEGIC PARTNERSHIP FOR PROTON

New strategic partnership between PROTON and a global established OEM will be established. Source - Bernama

Malaysian Auto Parts Suppliers Visit Germany, France

A high-powered marketing mission of Malaysian suppliers of auto parts and components will be in Germany and France on a week-long visit from Sunday to scout for business`prospects as more and more European car manufacturers seek foreign Original Equipment Manufacturers (OEMs) and Original Design Manufacturers (ODMs).

Malaysia, with a strong auto-parts and components supplier base, has good potential to make a strong impact on car manufacturers in Germany such as Volkswagen, Mercedes-Benz and others that rely on a steady supply of quality products for their cars.

“We’ve already set up meetings for the suppliers with their German counterparts. We’re confident the visit will generate good business for Malaysian suppliers on a long-term basis,” said Mohamad Sabri Ab Rahman, the Malaysian Trade Commissioner in Frankfurt, who is Malaysia’s point man in-charge of the mission’s visit to Germany.

The visiting group comprises 12 companies engaged in a wide range of automotive parts and components from hi-tech sensitive parts to components.

Sabri said the mission’s primary aim is to help Malaysian automotive parts’ and components manufacturers to expand their export market and Germany and France are two attractive markets.

The visit will also provide insights for Malaysian companies on the latest technology and automotive market trends.

In Germany, the delegation will visit Stuttgart and Frankfurt. Stuttgart is home to leading car manufacturers, particularly the Mercedes-Benz Group, which has huge operations in and around that city, said Sabri in an interview with BERNAMA.

The Malaysian External Trade Development Corporation (MATRADE had arranged for one-on-one business meetings for the Malaysian suppliers with their potential buyers.

The group includes Gallant Automotive Industries (M) Sdn Bhd from Selangor, which produces radiators and condenser fan motors, Carpets International Malaysia Manufacturing Sdn Bhd, also from Selangor, which manufactures interior trims, noise vibration products, parts and accessories for automotive replacement market, including lubricant oil), Amalgamated Batteries Manufacturing of Kuching (automobile batteries, conventional deep cycle and maintenance-free batteries).

Other suppliers are Rubber Products of Melaka (automotive rubber products, radiator, fuel, heater and vacuum hoses, rubber-moulded parts, exhaust hangers and rubber seals.

Kossan Rubber Industries Bhd of Selangor (hi-tech rubber products for wide range of applications); Tech Outlook (M) Sdn Bhd from Selangor (body kits, anti-lock braking system and design and development of products.

Tan Lan Holdings (M) Sdn Bhd from Perak, which produces motorcycle and bicycle parts); First Malaysian Coating Sdn Bhd from Petaling Jaya (coating solutions for automotive, marine, aerospace and industrial sectors); and KCL Metal Industries Sdn Bhd of Selangor (automotive components, accessories, automobile suspension system), Proton Vendors Association from Selangor (interest group promoting closer ties among vendors and between vendors and Proton).

Sipro Plastic Industries Sdn Bhd of Selangor (plastic parts and components for automotive and electronic industries); Guppy Plastic Industries Sdn Bhd from Penang (plastic parts and components for automotive, electronic, office equipment, medical and telecommunication industries); and Schwenhah Sdn Bhd of Kuala Lumpur (automotive accessories and engine improvement products).

Sabri said: “There is good potential to contract business from the German automotive sector which sources about 80% of its parts and components from overseas suppliers.

In terms of contribution to the total production cost of a car, some 60 to 70 per cent of the value is accounted for by systems and modules suppliers.

“The German industry depends on innovations from these suppliers to manage its cost and value-added attributes, he said.

According to information received from the Malaysian Trade Commission in Frankfurt, Germany is expected to produce about six million vehicles next year.

This figure includes both passenger and commercial vehicles. The value of Malaysia’s exports of automotive parts and components in 2008 amounted to US$4.35 million over US$4.09 million in 2007.

Malaysian companies have also been supplying automotive parts and components to Japanese and European car manufacturers.

While Malaysian automotive parts and components are appreciated for their quality, Malaysia faces fierce competition from India which has become a dominant force in the spare parts and components sector.

It is not unusual to see huge delegations of over hundred exhibitors from India showcasing their wares at the Frankfurt Automechanika Trade Fair, the world’s largest event for autoparts and components segment.

On the other hand, despite its much lower costs, China has never posed a threat to Malaysia as most German buyers nurse doubts about the quality of the former’s products.

Products from China also lacked innovative attributes compared to products from other countries including Malaysia and India.