Malaysia Automotive Institute CEO Madani Sahari has revealed that the upcoming revision of the National Automotive Policy (NAP) will further promote local vehicle assembly, particularly of Energy Efficient Vehicles (EEV), in an attempt to transform the nation into a regional production hub for EEVs.
At a meeting with members of the media held at the Ministry of International Trade and Industry yesterday, Madani also explained the structure of car prices in relation to excise duties and how they can be reduced by the increase of value-added activities undertaken by a carmaker.
The revised NAP will see manufacturing licenses and pre-packaged customised incentives given for EEV production and investment. A vehicle shall be classified as an EEV if it meets or performs better than a set fuel consumption figure for its kerb weight, and unlike the current 2,000 cc cap for hybrid vehicle tax exemption (which expires at the end of this year), there will be no engine size restrictions.
According to Madani, this has already received approval, and a table of vehicle kerb weights and their corresponding fuel economy figures required for EEV status has been drawn up (unfortunately, the table was not shown during the briefing). He also said that plans exist for EEV regulations to be also carbon emissions-based, although this would have to be put on hold until our fuel reaches Euro 4 grade.
The Road Transport Department (JPJ) would test the vehicles’ fuel consumptions to the New European Driving Cycle (NEDC)’s R101 standard and UNECE WP29 (the World Forum for Harmonisation of Vehicle Regulations), Madani said, adding that private sectors would also be encouraged to set up such testing facilities in Malaysia.
The MAI CEO also explained the breakdown of the car price structure (see above pic) – carmakers first submit an Into Showroom Cost (ISC), taking distribution costs, general expenses and profit into account (A). This figure gets excise taxed (B), before other costs (C) enter the equation. A 10% sales tax is imposed on the sum of the ISC, its excise tax and the other costs (D), and the on-the-road price is the sum of A, B, C and D.
He said that nett vehicle excise duties paid currently stand at 40-50% for locally-assembled cars, and 75-105% for imported cars. This serves to encourage foreign carmakers to set up shop here (with the potential of even reducing the duty to zero if enough value-added activities – like R&D and vendor involvement – are carried out in the country), thereby creating more jobs in the industry and contributing to the nation’s economy. Thailand and Indonesia, he said, are paying 30-50% and 30-75% respectively in excise duties.
The general message is that excise duties for imported cars are not going to come down any time soon, but through our Free Trade Agreements (FTA) with ASEAN and Japan, amongst others, there is a potential at least for import duties for cars from these countries to be reduced further.
Madani said that of all the said factors influencing car prices in Malaysia, only the import (if applicable), excise and sales taxes are within government control, but liberalisation through the FTAs could increase market competition that could in turn see new car prices come down.
Formed in 2009, the MAI works with MITI to develop and grow the local automotive industry through research and study, which includes the drafting of the NAP.
Looking to sell your car? Sell it with Carro.
so continental car prices won’t change?
article above said that duty can be zero-ed if enough value added activity….the duty reduce itself through VA activities without gov reduce current duty structure..two bird with one stone..it can reduce tax and creating jobs..rather than cut the duty and get cheaper car but not creating new jobs since there is no duties no motivation for car maker open plant here…it kinda good should be done long time ago..i think that y maybe BNGOON gov dont want to reduce the current tax structure…thats y oso i hate this gov bcoz cannot explain the easy thing..
so what you’re saying is, it’s fundamentally not the G’s responsibility to lower the duty to reduce car prices, but it’s the manufacturer’s job.
right? right? rightttt…..
hear that manufacturers? it’s your job! it’s not the G’s duty to lower the duty! but the manufacturer’s responsibility! if car prices are still high, it’s because of you makers! not enough VA to lower the duty.
right? righhhhtttttt….
gov responsibility is to regulate and enforce for long term…the gov now make way for the manufacturers to reduce the duty..it is up to the manufacturer to take action..way has been given
Yeah right…just like MITI the babysitter always ensure Proton price cheaper than competition…forcing others put higher price…such a fair market, eh!
Madani, if local assembled cars are taxed at 40 to 50%, how come the Honda Accord and Toyota Camry is priced at RM150,000 and RM180,000 when their US prices are at US$22,055 (RM66,165) for the Camry 2.4 and US$21,480 (RM64,440) for the Accord.
If you say taxes are only maximum 50% for locally assmebled cars, Accord and Camry should be less than Rm100,000. Somemore, the US prices are CBU prices. Our prices are CKD prices (70% Made In Malaysia Accord and Camry). The CKD prices should be much much lower.
Another issue is that the US prices are taking into consideration the US Honda and Toyota dealership already earning a profit and the US government already collecting taxes and excise duty. If Honda and Toyota Malaysia get direct from Japan, the prices are even cheaper as it is direct from the factory.
Come on Madani, do something about this. Basic things like this glaring at us, you don’t do anything but try to give complex reasonings to people. Are you waiting for your datukship or what?
Below are US car prices vs Locally Assembled CKD prices of cars in Malaysia. Can you see we are being ripped off? Better to abolish and dissolve MAI as MAI does not seem to be really doing anything but blowing gas.
Honda Accord 2.4
US$21,480 (RM64,440) RM175,000
Honda CRV
US$22,495 (RM67,485) RM150,000
Honda Civic
US$15,955 (RM47,865) RM115,000
Toyota Altis
US$16,130 (RM48,390) RM112,000
Toyota Camry
US$22,055 (RM66,165) RM180,000
Kia Sorento
US$23,150 (RM69,450) RM160,000
Hyundai Tucson
US$19,245 (RM57,735) RM140,000
Hyundai Sonata
US$20,895 (RM62,685) RM150,000
Hyundai Elantra 1.8
US$16,695 (RM50,085) RM118,000
CKD BMW 528i is locally assembled. In US$ it cost US$46,900 (Rm149,000)
but in Malaysia, it is sold for RM410,000.
BMW has set up locally assembled factory here. They have CKD cars for a long time. So, if CKD is 40 to 50% taxed, hwo can prices shoot up to RM410,000 for a BMW 528i?
The BMW CKD 328i is sold for US$36,500 (RM109,500). In Malaysia, the car is sold for RM300,000. How is this so when taxes for CKD locally assembed are at 50%?
Somemore its CKD, being locally assembled, the prices should be even cheaper than the US$ prices of CBU Made in Germany units. To make matters worse, BMW gets parts direct from BMW Germany AG, so, the prices are somemore cheaper. A BMW SKD 528i, direct from BMW Germany AG can even come to US$25,000.
The same with CKD E200 and E250 Mercedes. They are CKD but we are paying close to 3 to 4 times the actual global prices.
Madani, what are you doing? What is MAI really doing?
based on your comments here, its obvious that your knowledge on the subject matter is limited by your comprehension and dependent solely on the article above.
please spare us from your opinions on;
1. taxation – “the “D” can be reduce to 4% through GST…”
2. economics – “..it can reduce tax and creating jobs…”
The fact that you believed MAI (enough to quote them) puts your intelligence into question.
do you why many car maker when to thai other than cheaper labor cost..it bcoz 80% import tax..until now thai gov do not reduce this import tax..this happen when no afta back then
what ever %, thai car is cheaper than malaysia. Period! end of story!
When a journalist quotes someone, it doesn’t necessarily mean he/she believes what’s being said. In fact, by stating that the opinion is quoted, the journalist might even be trying to make it clear that the opinion is not his/her own, but he/she is merely reporting what’s being said.
Majority are not stupid if based on the favorite votes, unfortunately the majority lost to the bad guys! All of is should know about excise duty and free money in the pocket AP system by now.
means the cost is still there for car manufacturing companies, so broad consumers get nothing. there is economic benefit to lower the car price for broad public. as in malaysia, vechile especially KL would be essential rather than optional purchase, due to our public transportation system unfavored by most of people(u know the reason). Car & house is one of the most important purchase of the every people in a life time, more dispose income the people can use the money to fuel the economy, in many way. Which might helping in solving gap of wealth. by impose heavy tax on car price, the benefit parties would be both government and bank(interest paid more due to higher car price). there is no healthy life for the people of malaysia have spend 20-50% of their prime life time to work and pay loan for house and car.
Madani says that even if government reduce excise, car prices won’t go down because car companies won’t reduce their prices. Hello Madani, everybody knows Miti fixes the prices of ALL cars. Even if Honda wanted to drop their prices also, MITI will strike out the proposal.
Everybody knows MITI protects Proton and Perodua and will never allow any car company to go down in prices.
You think people are stupid kah Madani? In your press release you stress that car prices are beyond the control of the government and that government ONLY can play with the duty figures.
Madani, firstly, stop the AP crony practice. That alone is a big drain to the car industry. It just enriches30 or 40 people whilst 30 million people suffer. This kind of suggestions, MAI cannot do. They come out with longwinded things trying to complicate and confuse people. So, firstly, sort your AP crony nonsense. Secondly, don’t bull to people MAI or MITI has no control over car prices. Every single person in Malaysia knows MITI fixes car prices and it is the only government in the world where car manufacturers must get approval for the prices when they sell their cars. Its time to stop protecting Proton and Perodua. They must learn to stand on their own two feet.
So for a start, please don’t bull to people that MITI has no control over what manufacturers price their cars.
thats the problem here. Our automotive industries are politically driven, not economics/environment/people driven..
Post election – BN wins – and there is no need to please the citizen. Time to break election promises – and what is a better way than to make a simple promises to become complicated and confusing. Justify that the promises should be broken….
Yes, agree. Promise change then change promise
why la… so difficult to reduce car price ka?
Why la the revision. NAP should be killed off now. Good luck to those who voted without brain.
or NAP should be put to sleep.. indefinitely..
janji dicapati~
Another load of Bullshit to protect the silly Proton & Perodua.
it does not said p1/p2…it is state clearly locally assemble car that mean all car regardless of brand get the same tax if assemble in boleh..the higher localization the higher the tax reduce..obviously p1/p2 get the most adv since most the part locally source…this y many car maker starting to locally assemble plus added locally produce parts
So in summary, On The Road (OTR) Price = A + B + C + D = ha ha ha suckers!
the “D” can be reduce to 4% through GST but most of us rejected it
for D. actually A (spare part & raw material) already have sale tax & import duty. so the reduction gain in D was eliminate in A. we need to stop the ripple effect first.
pusing sana pusing sini…make it sounds good as it appear like car price going down..but turned up to be nothing..bullshit!! not every citizent understand what you are saying..the simplest math, car price tag down also cannot do?? simply said ownership cost down lah itu ini..sudah lah!
The government basically says that we go on keep dreaming of cheaper cars.
so means, dream cars will always only in dreams…..
pusing pusing, harga tetap sama
M’sians don’t need MAI to do this bs. Why have a bunch of folks who’s job is just to twist things that are already twisted? Go on keep fleecin the conned-sumers!
Completely agreed, 100%
It makes MAI completely useless, no brain at all, unable to do good things for the people and country. They are just a dummy or puppet.
jus a sec, do MAI people got paid aa?? who pay them?
fire them and makes our car price better!!
hope this helps!
If I’m not mistaken, post 2008 election we were talking bout being hybrid car hub in the region. Now they talk about EEV hub (probably hybrid went to TH or Indon odi)… All I know is we are still very much a CKD club… talk talk talk and talk…
Another empty promises from the bullshit government
Another empty promises from the liar government
The general message is that excise duties for imported cars are not going to come down any time soon. That is the main point!
O now we know who at the back of crap NAP.
Bullcrap. Lets compare the vehicle price structure from at least four other ASEAN countries. Anyone? Excise duty 30% to 50%(classified luxury) enough laa..
Did they even discuss minimum standard safety equipment other than pricing policies?
‘Import, excise and sales taxes are within government control’. Another crap. They don’t determine RSVP? Bullcrap!
RSVP plak.. RRP(Recommended Retail Price), hehe
If I’m not mistaken, post 2008 election, the G was talking bout Malaysia being regional hybrid hub. Now post 2013 election, we are no where being hybrid hub (probably the Japs went to TH and Indon odi) and now they talk about EEV hub… talk talk talk and talk… All I know is we are still very much a CKD club…
Actually there seems to be a loophole in the chart, since excise and sales tax is at ISC level, a car manufacturer can move expenses, distribution cost and profit to dealer’s margin at level C this way they need to set up a local company and bring the number to their local outfit. This will reduce the ISC level hence the multiplier on the duties and tax.
However by moving it down will subject to local income tax earned by the Malaysia Government which is a good thing.
man cant even find a matching tie for the shirt.
to decide national automotive policy?
i think not!
Bunch of retard revising the NAP. Tgk slide pun dah tau, no focus, lack of clarity. Aku pun bole buat slide bodoh mcm ni…
Selagi itu excise duty tarak remove, lu orang kerajaan tarak payah cakap manyak la. Kami bukan bodo maaaaa…
(OTR) Price = A + B + C + D .. LPPL!!!
Dun tok kok lah!
EEV hub? dah terlambat la bro…….jadi pirated VCD hub, boleh la…
Ya betul tu…Myanmar pulak buka kilang Toyota besar satu kampong…
No NAP, No Kroni Cry….
yalah, vote for them la..u think they are going to reduce car price so that u and me can afford to buy the honda, toyota, lexus, bmw and mercedes ka? dream on la. What a load of bullshit!
thats the problem here. Our automotive industries are politically driven, not economics/environment/people driven..
This are bunch of tok n twist only, no action a#*@e! Same-same, almost a week past on haze topic, we still tok n tok, or plan to tok only. Pray hard the haze will jus go away, n everyone will jus forget after some time. If this is a war, we all fried dee. Remember, this is them. Help yourself, dun hope.
I believe all paultan readers are educated. You guys can say anything and also offer a lot of genius plans like the opposition’s manifesto to rectify this long time unresolved issues. But sadly, these forumers and paultan readers are the minorities who really think rationally. the majority of the voters are not well educated. look at the remote area in sabah and sarawak, they don’t even have proper road to discuss about cars, let alone NAP.
You are wrong 51% of majority voted the so call “opposition” now…
They can win due to SPR gerrymandering… Just google it and you will know what it means..
In the end, the G should have said it easy that they will only reduce the car price which is CKD or made in Malaysia.. While others… Hmm… Wait long long laa…
And 1 more i think they forget to add E = AP
yes, i know about gerrymandering. They MAKE themselves majority by pulling some tricks that most of the public are not aware of.
anyway, agree with you. they still want to keep their AP kings!
Before election, nambikei nambikei nambikei. You help me, I help you. After election, you helped me, I play you.
One picture said due to Malaysia-Australia FTA, no AP restrictions on importation of CBU. Buy in Aussie and shipped it to Malaysia?
Australia made car, which has high CC (pay roadtoax pay die you) lol.
n also when can we get euro 4 grade diesel….???
So these are the people responsible for making all my dream cars beyond my salary!!!!
BN nak turunkan harga kereta dengan ikhlas demi rakyat? Pi mampuih la! BN lebih sayang kroni korup
MAI formed in 2009. After 5 years, we still cannot see any result to enhance our automotive policy and industry. In corporate world, this MAI is tossed on the day it was born. So under performing..
under performing?
or never perform
Excise duty on profit??
NAP 2013? It is half way through 2013 already. Next week July maa! What 2013 NAP? Thailand Indonesia already grab the FDI. Not forgetting, Vietnam where Tan Chong set up their new factory.
remove the excise duty, at least for national car…
All taxes customer have to pay …
A X 10%
B X 10%
C x 10%
Easy business, all costs pass to customer but company got loan from GOV, if fail GOV to bailout too ….ha ha ha
Hi All,
Day in – day out, month in – month out, year in – year out, we talk, discuss, analysis about what should the government do, what should MITI do, now what should MAI do, what should bank do….
Its always about what others should do, to make sure the car price drop to a more reasonable level (don’t need 9 years loan)… but 20 – 30 years of time should be enough to tell us that they wont do anything to our benefit, its always about what manufactures get, what AP king get, what OEM supplier get, so what about us…
As one earlier response said that , crazy is expecting different result while doing the same thing…
Its us that send the wrong message to gov, car manufacturers, AP kings… when the price increase every facelift, we are the ones that queue to book and some do book the car for 9 years long even before the launch of the car.
Let talk about, as consumer and citizen, what should we do? regardless what policy maker, gov agency and companies want to say. Personally, I will maintain my current ride (which is second hand) and refuse to buy any new cars. I will also convince my children, my friends, my family, my boss, my office mates so that they they wont be buying either… and justify it by ridiculous price or cars in Malaysia….
If we boycott any new cars for some time, how can the gov earn the so called RM7 billion tax from. I believe, if 90% of us hold our purchase, the gov will have a tough time to even earn RM1 million.
If we do this and play our part, we will gain mass and trust me they will succumb to our knees and price will drop… They can say a lot of thing, but if we aint buying, what the are saying is irrelevant…
So come on guy, play our part and don’t hope others to do this, we need to do this ourselves…
If we work together, we can win this…
When the buying stop, the killing can too…
Succumb, no. This is the gov that we installed(well not us, the majority). We can’t let them succumb. It would be the collapse of our country that will lead to chaos, and nobody wants that. The economy need to circulate and rotate.
But we can pressure them to reduce, minimize, articulate and simplify. We put them there, we’ll just tell them what to do and how to do it(since they have very little idea of what they’re doing when it comes to automotive policies).
You’re absolutely right!!
Well said it Along, it true and if we are united the Government will suffer . It the citizen of Malaysia are not buying new cars then the result will be different …..see it 100% correct. We are the one who make them richer so don’t blame them but yourself.
Still too many rules and regulations.
This NAP will be a failure.
Just open up the market and let the manufacturers
produce what the market want.
Ok. Definitely will maintain my current ride -_-“
“Malaysia Automotive Institute CEO Madani Sahari has revealed that the upcoming revision of the National Automotive Policy (NAP) will further promote local vehicle assembly.”
Under previous NAP we have been promoting local vehicle assembly so we are still in kindergarten after 30 years.
If you ask me NAP should be put in place for a 5 year or 10 year term. Not revised every year. This will create cnfidence in the industry and allow long term planning for the automakers.
Under local assembly we get an inferior product at a higher price because all the components had to be individually pack and send to Malaysia which leads to higher transport and administrative cost,
manual welding instead of high quality automatic welding,spray on instead of dip-in antirust,no economy of scale in purchasing of parts and many other reasons.
really annoying to people who sail with boat but claims reached the sky…….go and do some study prior to……
Really annoying too why MAI not show how banks milking easy profits on car loans and double-tax the excise duty factored in monthly payment…only BN voters failed to see this while banks, Kronies get richer billionaires
Aiyaaaaah…. actualy so easy only…reduce excise duty. Habis cerita… Now the gomen don’t want to get rid the luxury tax maaaa…. So make everyone life difficult laa… EEV laa incentive laa localization la..itu laa ini laa… Ceeeh…
It should be one straight line to reduce car price by zeroing the duty… But the gomen so smart…pusing sana pusing sini…how to maintain the taxes but lowering some degree of the car prices by pushing it to the industry players.
In a common sense…Its a another SPIN AROUND to make the cars NOT CHEAP in BolehLand. Billions of monies from the taxes mana boleh buang maaaa…
KZM clearly doesn’t know what is he talking. He is probably from Mahathir’s era and still truly believe Mahathir’s effort is benefiting the general public.
KZM what is the impact of job creation after so many years with NAP? You don’t create jobs while on the other hand create homeless. For most malaysians especially most malays, their car loan is either half or more than their home loan. Some even resort to RM500 rental which is the price of a Myvi Car loan at maximum years.
KZM if you truly understand this article, then please explain Vehicle Price Structure for Proton instead? Has the government ever shown that? What is the profit ratio? Proton hires monkeys in their plants and are being paid peanuts. Other than their directors, it’s a Zoo in there.
So KZM, please think thoroughly and evaluate the impact of NAP from every aspect.
Clearly this was just a tricks playing to fool low minded people. This would not give the price cut for any cars.. Maybe cut in 1-2K for 100K car?? What’s the different?
And somemore did you guys know that the excise duty was impose on proton and perodua also at 50-75%?.
This locally made car was just not having the import duty but the excise duty was the same as CKD Hyundai, Honda or others.
They said to create a competitive environment to Locally made car.. But this is absurd as we are force to buy local car with a high price.
I own both local car and imported car. And i know for my Viva i loaned at least 15K and give to goverment for excise. For Mazda i give at least 50K.
We put our head just to pay the loan and then gov can enjoy with the loan money.. It’s kinda very sad when u feel about that..
And c’mon did you guys really believe Myvi would cost around 60K? the same price as Camry in US.. Huhhh i feel kinda stupid…
it’s all same ol’ same ol’. this is wat get people really frustrated. look Mr. Gov including MAI, if u r really working, by now, we don’t need to debate about how to get the car price down. it’s too obvious. the national car has been doing their best to offer the cheapest, margin is x even half of the foreign brand. dats y give inferior car?! if u really want to do something, intervene from the hard source i.e. raw materials and pls don’t ‘main wayang’ promote R&D konon, when failure is not treasure instead penalized. do u know how many time thomas edison failed b4 his discovery??? another thing? y is BNM is not taking this hit too! all this 9 yers tenure. crazy! let’s put a clear line, if u cannot repay your car in less than 5 years than u cannot afford one. SO, pressure Mr.G super turbo the public transport efficiency. wat i know indon pun x offer loan lama2!what else car producing country like s.korea.huh?!
Fuel subsides can reduce but only if excise duties and import duties significantly reduce too. Government can’t be burdening the people in every way possible can it?
Dun forget One thing … “They” won’t read comments in here … No matter how many words we put in here … The only way is GE14 !!!
The reason why the car still costs a bomb in Malaysia is simple. Gov still tax autoparts. When CKD, the automakers have to either import the parts or buy the parts locally.
Importing parts which are taxed 100% or buying parts from companies controlled by BN-friendly folks at inflated prices will lead to the prices we pay for cars today.
Simple way to makan everything, no?
All this talk of “localised” content and local vendor involvement to create jobs is bullcrap. When they say a CKD car has XX% local content, does anyone ask where the parts are actually made?
Surprise surprise. They’re mostly made in China or Japan. “Local content” just means that the vendors/distributors for these parts are Malaysian companies. The actual manufacture of the parts never happened here. They’re just imported (and therefore taxable).
There are no jobs created. No economies of scale, because the auto market here is so small. Which OEM company in their right mind would want to spend so much to produce so little?
Unfortunately, it’s a vicious cycle. We all know that our Malaysian car companies are protected, and due to the relatively small volume they make (relative to Toyota, Honda, etc), their margins per car are very small. They simply can’t make more because there’s no global demand due to the low quality, therefore we’re back to square one.
It truly sucks being a car enthusiast in Malaysia.
still the tongkat technology.. never grow