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M'sian car vendors, dealers call for tax incentives

Publication Date : 13-09-2012


With the automotive industry's cry for the energy-efficient vehicles (EEV) tax exemption period to be extended pacified, industry players in Malaysia are now shifting their hope on other incentives in the 2013 budget to encourage a more competitive business environment.

Among Perodua managing director Aminar Rashid Salleh's recommendations for the upcoming budget were soft loans or grants or tax exemptions for local car vendors to assist them in becoming world class manufacturers.

“In addition, we hope that the government will give incentives to car vendors and dealers for training both domestically and abroad either via joint ventures or partners to upskill their workers,” he told StarBiz.

Aminar believed this was needed for the vendors to be globally competitive in terms of productivity, quality, delivery and cost competitiveness to survive full liberalisation of the automotive industry.

To reduce foreign labour employment, he also suggested a special fund allocation or incentives to OEMs for the purpose of training school leavers to help fill the need for semi-skilled labour, especially at the vendor level.

“We (further) implore the government to have certification programmes and quality standards introduced to ensure that the workmen are properly trained and the consumers are assured of competent workmanship,” Aminar said of staff at the after-sales service centres and body and paint outlets.

He believed that the industry and consumers would benefit from standardised service from independent centres.

On the industry's effect on the economy, Aminar also recommended the government “considers giving sales tax exemptions for first-time car buyers of national cars to allow a greater number of Malaysians to own a vehicle as the incentive would help buffer any shortfall in the economy next year due to external factors.”

“We also implore the government to initiate an end-of-life policy for aging vehicles to further enhance road safety while, at the same time, stimulate economic growth,” he said, adding that the government should ideally engage relevant stakeholders, such as consumer associations, auto manufacturers and finance companies, to ensure that the policy was well balanced.

On corporate tax, a point brought up by in other sectors as well, Aminar said: “We also request that the government consider the reduction of corporate tax to offset the increase in cost to all industries, especially with the introduction of minimum wage next year.”
He said the reduction in corporate tax would go a long way in helping businesses adopt the rising cost of doing business without having to raise its product or service prices.

Malaysian Automotive Association (MAA) president Aishah Ahmad said since the government had extended the duties exemption on hybrid cars below 2,000cc until end-2013, “we are hoping that the 2,000cc and above EEVs could enjoy the same benefits.”

“It would be good if the government also considers reducing duties on motor vehicles which now range between 65 per cent and 105 per cent,” she said.

Edaran Tan Chong Sdn Bhd executive director Ang Bon Beng pointed out that as the automotive industry had been reported to contribute 6 per cent to 8 per cent  to the gross domestic product by year 2020 from the current 2.4 per cent , Tan Chong hoped that the government would take on gradual structural changes for the industry.

“We hope to see changes to some structural issues to boost the growth of the auto industry,” he said, “Nevertheless, we expect the government to adopt gradual, instead of drastic liberalization, to ensure market stability.”

He also noted that auto players as well as MAA have submitted various proposals to the government under the National Automotive Policy review which will be revealed soon.


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