This Friday, September 28 will see the National Budget 2013 tabled by Prime Minister Datuk Seri Najib Tun Razak. Bernama has reported that the upcoming Budget allocation is expected to increase by 10-20%, or up to RM300 billion compared to the previous RM232.8 billion.

Due to anticipation of the probable reduction of car duties, we’ve heard that some dealers have experienced drops in sales between 20-50% this month.

There isn’t long to wait now, and BMW Group Malaysia has released a statement by Managing Director Dr Gerhard Pils, outlining the group’s wishes for the Budget. In reference to the import and excise duty exemptions for electric and hybrid vehicles (currently limited to sub-2,000 cc engines), BMW Malaysia hopes they can be extended to all vehicles with green technology regardless of engine size, taking efficiency and emissions figures as the main criteria for consideration.

Amongst others, the group also desires more support in Advanced Diesel technology – which it says is “proven to be the most immediate solution” to the rising fuel costs – and a step towards adoption of Euro 4-standard fuel in the immediate future.

As you can expect, much more is to come as the day looms closer, so if you want to keep pace, keep watching this space!

Statement by Dr Gerhard Pils, Managing Director of BMW Group Malaysia

In the upcoming Malaysian Budget 2013, BMW Group Malaysia would like to see a continued emphasis on the positive steps towards encouraging the uptake of advanced environmentally friendly technology in the automotive industry which continues to provide significant economic opportunities for both local as well as international automotive companies present in Malaysia.

The on-going initiatives by the government such as with the mandatory adoption of bio-diesel has served to galvanise the industry towards appreciating the value and worth of diesel fuel alternatives and should be rapidly followed by a legislative framework which will see the nation’s adoption of the internationally recognised Euro IV specification for fuel in the immediate future. Such a move would ensure that Malaysia is compliant with world standards while providing citizens with the additional benefits of having better fuel consumption, a much lowered overall costs of vehicle ownership as well as lower emission of greenhouse gases such as carbon dioxide (CO2) into our environment.

As the world’s automotive industry is at the tipping point of change in terms of technology, Malaysia is at the forefront of capitalising on newfound opportunities with a concentrated emphasis on advanced ecologically friendly vehicles where we now have the opportunity of becoming a regional hub for the development and manufacture of energy efficient vehicles and components.

In light of the emerging strengths of Thailand and Indonesia as prime destinations for automotive development, it is important that the Malaysian government adopts a twofold strategy of encouraging greater investments towards introducing advanced green technology into Malaysia by businesses throughout the automotive supply chain, as well as financial incentives to encourage early adoption amongst consumers.

While the Malaysian government has already begun to provide import and excise duties exemptions for Electric as well as Hybrid vehicles, the framework of the existing policies remains restrictive as they are limited to vehicles with engines below 2,000 cc in capacity. We at BMW believe that for the full benefits of new and green technologies to be fully appreciated and adopted, the exemptions need to be extended to all vehicles that utilise such technologies regardless of engine size but with efficiency and emission figures as its main criteria. This will encourage early adoption by all consumer segments, as well as the entire automotive industry itself.

Furthermore, the Malaysian government should also look towards expanding its definition of Advanced Green Technology to also encompass existing Advanced Petrol and Advanced Diesel technologies which have come a considerable way in reducing emission standards.

In particular our fleet of BMW Advanced Diesel vehicles, which have been available in Malaysia since 2009 are capable of providing reductions in fuel consumption of up to 25% with the ability of travelling up to 1000km on a single tank of fuel. For the layman, this means that for every five days of travel, the fifth day can be considered free of fuel costs when compared to its petrol engine counterpart. Most importantly, Advanced Diesel alternatives are now able to match even hybrid vehicles in terms of emission standards.  

Whilst these vehicles do not enjoy the government’s duty exemption benefits outlined in last year’s budget compared to their Hybrid Technology counterparts, we hope that Advanced Diesel technologies would be included in the revision of the National Automotive Policy as the technology has more than proven its worth to be efficient. At the current moment, Advanced Diesel technology is also proven to be the most immediate solution to the rising fuel costs for the automotive industry.

Nevertheless, BMW Group Malaysia is undeterred in its commitment to introducing the full range of its Advanced Green Technology vehicles to Malaysian consumers and the next phase of our BMW EfficientDynamics strategy will begin with the market introduction of the new BMW ActiveHybrid 3 and BMW ActiveHybrid 5. These new models offer excellent driving economy in both urban as well as non-urban driving conditions and will provide Malaysian customers with the most advanced Hybrid technology currently available.

On a final note, the Malaysian government’s current deliberations regarding the reduction or removal of excise duties is highly welcomed by BMW as it encourages a more competitive playing field which in turn will provide tremendous benefits to consumers, automakers as well as the general economy. However, it is imperative that the government approaches the planning and execution of such a change in policy with transparency, clarity and foresight to not cause disruption to the current growth that the industry has been experiencing over the last few years.

With the Malaysian automotive segment well on the road to recovery following the challenging economic conditions of the previous years, this is to ensure that businesses throughout the automotive industry supply chain are given the opportunity to make the appropriate preparations ahead of such a major transition and do not in turn become victim to speculative tendencies in the market which could result in a severe and negative blow to our re-emerging industry.