NATIONAL AUTOMOTIVE POLICY 2014

NATIONAL AUTOMOTIVE POLICY 2014

Personally, I am disappointed with the recent launch of the National Automotive Policy. The possibility of a cheaper car is as good (or as bad) as the possibility of abolishing the open AP. The copy of the NAP 2014 is available at HERE. 

1. The NAP 2014 is encouraging the re-badging of national cars instead of building our own, with its recognition of PERODUA as a national car. The Intellectual Property Rights for all PERODUA models are not with Malaysians for PERODUA to be called a National Car. 

2. The National Automotive Policy did not provide a clearer framework and a roadmap on the direction the government wants to drive the National Car in terms of producing its own design, chassis and engine.

3. In the past, the government drove PROTON to invest in technology capable of building its own engine, its own car and to move away from re-badging. For years, the dealers had to sell these vehicles with a fragile margin and the public had to pay more for PROTON cars due to a higher cost of production.

4. Unlike previous NAP, which omitted Perodua as a national car, NAP 2014 expressly stated Perodua as a national car, although Perodua is majority foreign-owned and only produces re-badging of already established vehicles. 

5. There is no clear guideline to what constitutes a National Car and non-national, and without it, incentives can be abused. At the moment, the term national car status is subjective, interpreted and understood differently by various parties, even by different authorities.

6. Incentives should only be given to a national car to keep price competitive for the public while investments can be made for a truly born Malaysia made vehicles. If that is still the drive. 

7. NAP 2 has failed (a) to increase bumiputra participation in the dealership network as well as (b) preserving specific segment for PROTON market share, which was part of its objectives. (see: NAP2)

8. There is also no report available on the achievements of NAP 2 in its entirety. 

9. Incentive to PROTON is not about protecting PROTON, but it should be given as a carrot to acquire future technology for PROTON to produce a reasonable and competitively priced Malaysia-made vehicle instead of re-badging.

10. We cannot compare Malaysia to Thailand and Indonesia because our population is only one-third, if not less than, Thailand and Indonesia’s car buyer population. If we want our national car to succeed, the government must provide a more prominent policy.

11. Cheaper cars can be attained either with better economies of scale by preserving a particular segment for specific car models that were researched, designed, built and produced in Malaysia or through the re-badging of cars without hefty R&D investment like Perodua. Current policy is encouraging Perodua's business model of rebadging.

12. PEDA welcomes all efforts and policies for cheaper cars. Still, incentives should be given to manufacturers that produce made-in-Malaysia vehicles from their own R&D. This is the essence of the establishment of the national car project.

13. PEDA lauded the establishment of Malaysia Automotive Council (MAC) but appealed for the council to include all in the automotive eco-system, such as the Banks, the Association of Used Car, the vendors association and the association of dealers representatives to be part of the council. This is important to achieve the NAP 2014’s objectives to promote a competitive and sustainable domestic automotive industry.

14. PEDA is also disappointed that there was no directive for Malaysian automotive manufacturers/distributors/assemblers to conform to the New Car Assessment Program (NCAP) and elevate our motor vehicle safety standards, or the safety during road collisions and crashworthiness. 

15. PROTON has conformed and complied with the NCAP. Still, most other manufacturers, as per the list displayed on the JPJ Website, were given a waiver and exemption and are profiting from a cheaper cost of production at the expense of public safety. (See: JPJ and refer to my earlier blog at HERE)

16. PEDA disagree to the voluntary inspection for vehicle older than 5 years. No one would want to volunteer and pay extra for an inspection in the light of rising cost of living.  If an inspection is necessary, it should be mandatory. 

17. Perhaps the insurance company or Banks can bear the cost of inspection when car buyers renew its annual insurance policy as part of the insurer’s measure to safe guard its asset. The government can also reduce the insurance policy premium for cars that passed the mandatory inspection.

Further reading (to be updated):

1. The Malaysian Reserves - Peda: NAP policy ‘not clear’ on national car.
2. The Star Online - National Automotive Policy Lacks certain incentives.
3. Paul Tan - NAP 2014: Proton Edar Dealers Association response