119215153509.gif1131118132131.gif

News & Events

[ 27-01-2014 ]
RM2bil boost for National Automotive Policy, Govt allocates soft loans, grants

More incentives: (from left) International Trade and Industry deputy minister Datuk Hamim Samuri, Mustapa, secretary general of the ministry Datuk Dr Rebecca Fatima Sta Maria and Malaysia Automotive Institute CEO  Mohammad Madani Sahari at the unveiling of NAP 2014

More incentives: (from left) International Trade and Industry deputy minister Datuk Hamim Samuri, Mustapa, secretary general of the ministry Datuk Dr Rebecca Fatima Sta Maria and Malaysia Automotive Institute CEO Mohammad Madani Sahari at the unveiling of NAP 2014

PETALING JAYA: The Government is allocating RM2bil worth of soft loans and grants under the National Automotive Policy (NAP 2014) for automotive infrastructure-related and human capital development purposes.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed, who unveiled NAP 2014 yesterday, said the Government would be allocating up to RM1.89bil in soft loans and RM175mil in grants.

“The loans would be for the development of tool, dies and moulds, component technology pre-commercialisation, competitiveness-related activities, distribution infrastructure establishment as well as the development of energy-efficient vehicle (EEV) infrastructure,” he said.

Grants, meanwhile, will be allocated for human capital and bumiputra development.

Mustapa said the main objectives of the NAP 2014 was to turn Malaysia into a regional automotive hub for EEV and promote a competitive and sustainable domestic automotive industry.

He said the Government would provide customised incentives for EEV-related foreign direct investment and domestic direct investment.

The incentives included research and development as well as training grants, infrastructure facilitation and lower taxes.

“There are no investment conditions to qualify for the incentives,” said Mustapa, adding that the Government was targeting to grow its exports of recycled materials and remanufactured components to RM2bil by 2020.

EEV is defined as vehicles that meet a set of defined specifications in terms of carbon emission levels and fuel consumption.

EEV includes fuel-efficient vehicles, hybrids, electric vehicles and alternatively fuelled vehicles, such as compressed natural gas, liquefied petroleum gas, biodiesel, ethanol, hydrogen and fuel cell.

Among the automotive players who have already invested in EEV-related initiatives are Honda, Mazda and Perusahaan Otomobil Kedua Sdn Bhd (Perodua).

Perodua is investing up to RM1.8bil for capacity expansion of up to 100,000 units a year for the production of EEV vehicles. Honda has committed RM1bil worth of investments to double its annual total production capacity from 50,000 to 100,000, while Mazda is likely to invest up to RM450mil to set up a dedicated EEV line to produce 30,000 units annually.

According to Mustapa, EEV-related investments stand at RM3bil as of October 2013. Investments hit RM5bil in 2012.

“We would like to see investments for 2013 reaching at least RM5bil,” he said, adding that the Government was targeting three to four more manufacturer licences for EEV original equipment manufacturers by 2018.

The NAP, aligned to the Government’s Economic Transformation Programme, is aimed at creating the “quantum leap” for the local industry players to move into the next era and enable them to face global automotive challenges of the future.

It was introduced in 2006 to help regulate the local automotive industry and help turn it into a regional, if not global, hub. In 2009, it was reviewed to better reflect the changes in the automotive industry.

However, it has been widely criticised for not tackling key issues, such as the approved permit system (whereby importers need to have one permit per car) and protectionism of local car companies.