Thursday, March 23, 2006

The New NAP

The Government of Malaysia has finally unveiled the new National Automotive Policy (NAP). The new tax structure which took effect yesterday, is exected to lower the prices of cars(fully imported and locally assembled).

It was reported that the players in the motor industry were happy with new policy. Read the interview with Aishah Ahmad, President of the Malaysia Automative Association here

Tax cuts include:
- Between 20 and 40% (depending on engine capacity) for Completely-built-up (CBU) passenger cars made in Asean
- Between five and 30%, for completely-built-up (CBU) passenger cars Non-Asean cars.

Two of the major points of the NAP: (from the Star report)

- Doing away with Approved Permits (APs) by Dec 31, 2010
- Establishing only two national manufacturers

Another report says that "the immediate beneficiaries will be national carmakers Proton and Perodua, who lead the industry in terms of production, sales volume and market share".

The two national car makers are expected to benefit from grants and incentives,"to help them boost production and seek more export markets". They would be happy with the ruling that no new manufacturing licences until overcapacity in the domestic automotive sector is resolved

The Government also plans to ban the import of re-conditioned (second-hand) cars by Dec 31, 2010 except for personal usage.

The Downside: Those who had been planning to get an MPV or 4WD will be dissapointed as the the duties on these vehicles were not reduced as much as for passenger cars.

Read what Paul Tan's report here


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