Bernama News report- National Automotive Policy

October 28, 2009 19:20 PM

NAP Review Addresses Most Issues In Auto Eco-system, Says PEDA

KUALA LUMPUR, Oct 28 (Bernama) -- The revised National Automotive Policy (NAP) has addressed most of the predicaments in the automotive eco-system, says Proton Edar Dealers Association Malaysia (PEDA).

PEDA's president, Armin Baniaz Pahamin said the policy addressed three main aspects imperative to the Proton eco-system.

"In particular, it addressed the conflict of the two national car makers competing rather than complementing each other, and provides a pragmatic future direction towards Free Trade Agreement (FTA)," he said in a statement here.

"It specified the importance of Bumiputera dealership in the network and the critical issue faced by the vendor and it also addressed the overall saturated and stagnant automotive market."

Armin Baniaz said the public will benefit from the economies of scale gained from preserving specific market segment in the domestic market share for Proton.

He said although the second national car project, launched in 1994, was meant to complement Proton and expand the local automotive product range, they were both now competing in the same market segment and dividing the market share.

"This had led to a lower production (for vehicle in the same segmet), under-utilising the production capacity by both manufacturers in a stagnant if not deteriorating market segment," said Armin Baniaz.

PEDA also lauded the clear directive to increase Bumiputera participation in dealership network.

However, the existing 100 per cent Bumiputera owned dealership that is currently a minority with a total of less than 20 per cent in the dealers network, should be preserved and nurtured, said the president.

The tax/duty exemption on the value of increased Exports of Vehicle and Parts/Components and the gradual removal or reduction of import duty, meanwhile, will be a catalyst to attract a strategic partner for Proton.

The mandatory annual inspection for vehicles above 15 years as a first step towards implementing a Vehicle End of Life Policy is a good move and in line with other developed countries, the association said.

However, PEDA hoped that the scrapping policy that was introduced under the second financial stimulus should be continued especially with the momentum that has picked up.

"Although the quantum offered to scrap 10 years and older vehicle is low but it should be an option given Malaysia's relatively high average vehicle age," Armin Baniaz said.

"The scrapping of old cars is important for our automotive industry that is now quite saturated. The introduction of Vehicle End of Life Policy will address our saturated automotive market as well as vehicle road worthiness and environmental issues."

The phasing out of imported used parts and components including the half-cut will then benefit all parties from the public, Proton vendors as well as the authorised service dealers, he added.