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Thursday, January 23, 2014

Malaysians to pay more for safety after NAP?

JANUARY 20, 2014
Members of the media surround the Toyota FT-1 concept car as it is unveiled
on stage during the press preview day of the North American International
Auto Show in Detroit, Michigan January 13, 2014. ― Reuters pic
KUALA LUMPUR, Jan 20 — Malaysians already paying some of the highest prices for cars worldwide may have to dig deeper into their pockets following additional measures for vehicular safety set to be announced in the National Automotive Policy (NAP) 2014 today.

The NAP is expected to formalise a controversial end-of-life vehicle (ELV) policy today, despite the uproar that caused Putrajaya to walk away from a suggested 12-year limit on cars in November last year.

In a media briefing last Wednesday, Malaysia Automotive Institute (MAI) CEO Madani Sahari explained, however, that the proposed roadworthiness test for Malaysian cars will be voluntary.

“The vehicle roadworthiness test is more towards educating motorists on the importance of safety ... They will cost around RM70 each time,” Madani told The Malay Mail Online in a phone interview last week.

Despite that, MAI remained silent on whether motorists will be awarded any incentive for inspecting their vehicles on schedule.

It is believed that one of the mechanisms proposed was for owners to be given a road-tax rebate if they have their vehicles inspected annually, but MAI was quick to point out that Putrajaya might not agree to it.

MAI also did not hide the fact that the ELV policy is meant to create business opportunities for Malaysians to open inspection centres, as a total of 300 inspection centres nationwide is needed.

Currently, there are just over 50 Puspakom centres, which was Malaysia’s first computerised vehicle inspection centre, but not all of them are currently outfitted to inspect passenger vehicles.

There also remains concerns over the allegations of corruption that have plagued Puspakom since the late 1990s, where several branches allegedly demanded money from owners to expedite their approval process.

The Malaysian Anti-Corruption Commission (MACC) also placed Puspakom inspectors under watch last year, following claims of bribery in the inspection and approval process.

The NAP will also require new models to comply to the whole vehicle type approval (WVTA), an international standard of car safety regulations, starting January 1 2016.

The mandatory regulations will also include national carmakers Proton and Perodua, which could add to costs from the adoption and testing of additional safety components.

Currently, Malaysia is a member of the United Nations’ World Forum for Harmonization of Vehicle Regulations, also called WP.29.

But Madani rejected that conforming to the WVTA will increase costs substantially for the production of national cars.

“The technology already developed now are heading towards increasing safety. So now safety technologies have become off-the-shelf through mass production,” Madani explained.

According to him, with additional nationwide focus on car safety, the market forces will regulate the prices for car safety components.

Those expecting cheaper cars soon will likely be disappointed, as the NAP is expected to follow through on the five-year Car Price Reduction Framework started last year.

However, it is understood that one of the new points would be further price reduction from the implementation of the goods and services tax (GST) in April 2015.

MAI projected that the 6 per cent consumption tax will mean lower car prices compared to the current 10 per cent sales and services tax.

Elsewhere, the bulk of the NAP will be on how to increase Malaysia’s attractiveness as an automotive hub, and to entice foreign investors away from neighbouring Thailand and Indonesia.

This comes as investments in the two countries are heavily dominated by Japanese manufacturers, while several European, Korean and Chinese marques still do not have any foothold in Southeast Asia.

The Minister of International Trade and Industry Datuk Seri Mustapa Mohamed will be unveiling the NAP 2014 this afternoon, with MAI promising more surprises to come then.

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