The 2014 National Automotive Policy (NAP 2014) was potentially the only piece of good news for this “Barang Naik” year, until it was eventually announced this week.
While I applaud the federal government for putting the focus on Energy Efficient Vehicles (EEV), the whole policy itself is very vague at best and contradictory at worst.
There are at least four contradictions in the NAP 2014:
1. NAP 2014 contradicts promotion of EEV
Firstly, on the EEV itself, while the document provide for the definition of EEV, questions remain on who will be certifying authority and what are the actual incentives and how are they given for EEV. Compared to the earlier NAP, the lack of such important details points to the lack of seriousness on the part of the government.
2. NAP 2014 contradicts policy on public transport
Secondly, the principle of NAP 2014 is in contradiction with the draft national land public transport masterplan and the federal government’s NKRA on public transport.
In the NAP 2014, the government is aiming to increase the total industry volume (TIV) of vehicles in Malaysia to 1 million unit by 2020 from 650,000 units now. This essentially means more vehicles on our streets. Today, for a nation of 29 million people, we have 21.2 million registered cars and motorcycles. That means, for every five Malaysians including babies and children, four of them have a car or a motorcycle. Whatever happened to promoting public transportation, reducing traffic congestion, and moving people and not cars?
3. NAP 2014 contradicts NAP 2009 on AP
Thirdly, NAP 2014 is in direct contradiction with NAP 2009 which targeted the abolishment of Approved Permit (AP) by 2015.
The AP system is obviously a part of the rentier economy practiced by Barisan Nasional. While claiming to assist Bumiputera, it is not clear how helping a handful of cronies will help the wider Bumiputera community. NAP 2009 stated that charges collected on AP were to be set aside to fund Bumiputera empowerment in the automotive industry with the aim of abolishing the system starting 2015. What happened to this fund and why is the government delaying their own commitment to abolish this classic rentier scheme?
4. NAP 2014 contradicts BN’s GE13 manifesto
Fourthly, the NAP 2014 is in contradiction with Barisan Nasional’s 13th General Election (GE13) manifesto to reduce car prices between 20-30%.
There is no clear strategy other than rhetoric about market liberalisation to increase price competitiveness. However, the government has also made it clear that excise duty will not be abolished. Currently excise duty is between 65-105% and brings in about RM7.3 billion for the federal government in 2013.
The high protectionist excise duty, coupled with the introduction of GST which may affect every layer of supply chain of the automotive industry and the implementation of GST on used car market; it is highly unlikely that BN can fulfill its GE13 promise at all.