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Car manufacturing gazetted as essential services, now allowed in MCO

Car manufacturing gazetted as essential services, now allowed in MCO

16 Jan 2021

Cars manufacturing has been gazetted as one of the essential services, allowing it to operate during the Movement Control Order (MCO).

According to the Federal Government Gazette amendments issued on Jan 15, automotive manufacturing and components has been included in the essential services list among 18 others in the manufacturing category. 

Automotive maintenance and repairs is also listed in the services category.

The latest gazette confirmed The Malaysian Reserve’s report yesterday that the government would allow car manufacturers to reopen their manufacturing and assembly lines.

Previously, when the Movement Control Order (MCO) 2.0 began on Wednesday, automotive manufacturing and after sales services were included in the list of sectors operable during the period.

The manufacturing plants were in operations on Wednesday, before the directive was updated which only allowed automotive repairs and maintenance services.

Manufacturing plants had run one shift on Thursday before they were closed in adhering to the new order.

“The cost of production disruption for automotive sector is about RM160 million a day. It is a very costly, unnecessary event,” one source told TMR.

The source said order backlogs at the moment is estimated at 150,000 units, which is about 25% of the total industry volume.

The government previously has agreed to extend the sales tax exemption for passenger cars to another six months until June 30, 2021.

A source said any closure of automotive plants would defeat the objectives of the tax incentives.

Source: The Malaysian Reserve