NAP to benefit local car companies

​The National Automotive Policy (NAP), which was supposed to be announced in the first quarter of last year, has been delayed and is expected to be revealed this quarter

The National Automotive Policy (NAP), which was supposed to be announced in the first quarter of last year, has been delayed and is expected to be revealed this quarter.

AmInvestment Bank Research reckons that the NAP is likely to further benefit Perodua.

“The upcoming NAP is expected to further push for initiatives to make Malaysia a regional hub for energy-efficient vehicles (EEVs). This direction could see further excise duty exemptions or customised incentives accorded to carmakers that comply with EEV standards.

“If this materialises, we believe that it will benefit Perodua which has the highest concentration of EEV-certified models. This change could improve its product pricing competitiveness and expand its sales volume. Hence, we continue to like MBM RESOURCES BHD and UMW HOLDINGS BHD which hold strategic stakes in Perodua.”

Besides Perodua, the research house says various models from other marques such as the Mazda CX-5, Mazda CX-8, Toyota Vios, Honda City, Jazz and the Civic, the Proton X70 and the upcoming Proton X50, all of which comply with EEV standards, may also stand to benefit from any change in duties or incentives.Commenting on the NAP, BERMAZ AUTO BHD (BAuto) executive chairman Datuk Seri Ben Yeoh says the NAP should look into the sustainable growth opportunities for the auto industry, as the sector is impactful on social economic growth.

“Sustainable growth can be achieved with a well-defined vehicle end-of-life policy. Additionally, the NAP should encourage the development of next generation products focusing on connectivity, electrification and safety.

“This will ensure consumers are provided with energy-efficient, safe vehicles and expose the shortcomings of current technologies in mobility, ” he says.

In an interview in November, Proton chief executive officer Li Chunrong told StarBizWeek he was hopeful the NAP would help pave the way for the sector to fast-track its presence globally.

“I wish the government can support local original equipment manufacturers to achieve higher exports. Ideally, for every six people in Malaysia, we’d like to see one person related to the automotive industry, ” he says.

“This would be good synergy. This is why many countries consider the auto sector as a pilot industry.”

On Monday, Li said Proton is looking to ramp up its annual exports to 4,000 units this year from 1,070 units in 2019.

“Last year, Proton exported to six countries. This year, we want to reach more than 10 countries.”

Meanwhile on Tuesday, Perodua president and chief executive officer Datuk Zainal Abidin Ahmad said its exports hit 2,825 units last year, up from 2,184 units in 2018.

At a media conference earlier this month, Frost & Sullivan mobility senior vice-president and associate partner Vivek Vaidya said until provisions of the NAP are clear, the growth of next generation vehicles such as electric vehicles is expected to be flat.

“New exponential growth areas such as electric vehicles should be supported by a strong policy, infrastructure and business model support,” he says.

Vaidya also said that having a vehicle end-of-life would benefit the local automotive industry.

“Malaysia has a high level of car ownership. At close to 450 cars per 1,000 people, almost one in two individuals own a car and that is a drag on new vehicle sales.

“For the given infrastructure and geographic car ownership patterns, the Malaysian market is saturated. Unless a stringent end-of-life norm is implemented, explosive growth within the local automotive industry looks difficult.”

Source: The Star 

Posted on : 25 January 2020
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Last Updated : Thursday 21st May 2020