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28 October2009

Malaysia to announce National Automotive Policy today

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Malaysia’s Ministry of International Trade and Industry (Miti) will release details on the long-awaited review of the National Automotive Policy (NAP) at 10am Wednesday, reported the StarBiz, quoting press invites sent out Tuesday.

Miti’s review of the NAP would probably include fresh measures and incentives aimed at making the local automotive industry more competitive regionally and in the international market as a whole.

The NAP was introduced in 2006 with the intention of turning Malaysia into a regional, if not a global, automotive hub.

Three years later, the local industry is still lagging behind despite being the largest market in terms of sales volume in the region.

The ministry said in August that the review would focus on ensuring orderly development of the local automotive industry, not only to attract new investments but also encourage expansion on existing operations.

Research and development could be one of the areas to be given top priority, with emphasis on new automotive technology like low-emission vehicles.

The review may also include refining existing automotive policies to bring the industry up-to-date with global standards.

A more rigorous vehicle-testing standards could be in the works, while the domestic fuel quality sold at local pumps may be improved. A new scrapping policy could also be introduced. The Government may also announced a timetable to phase out the current approved permit (AP) system.

In tabling budget 2010 in Parliament last Friday, Prime Minister Najib Razak said the government would charge 10,000 ringgit (1$=3.5 ringgit) for every open AP from next year.

A portion of the money will be channelled into the Bumiputera Development Fund in the sector. Analysts, however, are not expecting changes in the existing tariff structure under the review.

“We are not expecting big changes in terms of car pricing,’’ OSK Research analyst Ahmad Maghfur Usman said when contacted by StarBiz yesterday.

However, changes in the country’s automotive policy will have an impact on Proton Holdings Bhd, its close rival Perusahaan Otomobil Kedua Sdn Bhd, their vendors as well as other players in the assembly, parts manufacturing and distribution sectors.


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