Budget 2010.. PEDA's perspective


I was asked by RTM yesterday to comment today 9 October 2009 at 12pm on the soon to be announced Budget for the year 2010. Without being too detailed and meticulous on a long winding wishlist (as per the proposal submitted during the Ministry of Finance Budget Consultative Council meeting) and especially since I have no idea on the actual air-time given, I will summarize as follows.


1. The Budget and governmental policies have to address the automotive eco-system in the entirety to build resilience and revitalise growth.

2. The automotive eco-system comprised of automotive manufacturers, assemblers, vendors, distributors, new car dealers, Banks, Insurance companies, used car traders, the potential buyer as well as the market as a whole.

3. Any failure in the eco-system will not build resilience but instead hinder the development and growth for the local automotive industry.

4. Domestic car sale is influenced by 3 major macro factors primarily, Banking facilities & packages; the People's Purchasing power (affordability and disposable income) ; and the saturated market.

5. Unlike developed countries where automotive manufacturers and distributors owned a financial arm and provide themselves financing packages to buyers, in Malaysia end-financing for cars depended solely if not heavily on Banks.

6. A continuous, flexible and cheaper Banking facilities & support will strengthened the manufacturers, assemblers, vendors and dealers.

7. An easier to obtained loan for car buyer will ensure a continuous and increasing demand for cars sales. If Banks were to revised the credit risk scoring for potential buyer (irrespective for whatever factor), car sales will fluctuate.

8. However, if the purchasing power at large are still affected by inflation or rising cost of living resulting from increasing cost of essential expenditures, automotive sales too will be affected.

9. The public's disposable income should be addressed by the Budget 2010.

10. To address the saturated market for automotive sales, the scrapping policy introduced under the 2nd financial stimulus should be extended. The scrapping policy should be made a long term objective to address the saturated market as well as for road safety and worthiness.

11. The government had announced the scrapping policy will end by December 2009 this year.

12. This saturated market too had caused second hand or used car value to significantly deteriorate that the car owner had to pay the Bank to sell his car (if the car owner cant afford to continue servicing his monthly car loan instalment due to retrenchment or rising cost of living) or to trade-in his existing car for a new car.

13. Perhaps the government can provide a proper valuation that took into account the period of financing that Banks are authorised/allowed to provide, so the public is not burden with 'unfair' valuation.

14. The valuation of second hand/used car should also take into account other details such as the vehicle mileage, accident-free history, serviced and maintained by authorised workshop, extra additional accessories etc.

15. If this 3 macro factors were addressed in the budget 2010, the automotive industry can be revitalised and strengthened.



  1. you look totally hot when you came to RTM yesterday ; )


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