peda-logoA number of automakers have issued official statements and responses in relation to the National Automotive Policy (NAP 2014) that was announced by MITI on Monday – next, we have a press release issued by Proton Edar Dealers Association (PEDA) Malaysia in response to NAP 2014.

“PEDA regrets that NAP 2014 did not provide a clearer framework and a roadmap on the direction the government wants to drive the national car (Proton) in terms of producing its own design, chassis and engine,” PEDA president Armin Baniaz Pahamin said in the association’s statement. He added that the policy will encourage the rebadging of national cars instead of us building our own.

Here is the rest of the PEDA statement in full:

“In the past, the government drove Proton to invest in technology capable of building its own engine, its own car and to move away from rebadging. For years, the dealers had to sell these vehicles with a very thin margin, and the public had to pay more for Proton cars due to a higher cost of production.

Unlike the previous NAP, which was silent on Perodua as a national car, NAP 2014 stated Perodua as a national car, although Perodua is foreign-owned and only rebadging already established vehicles.

There is no clear guideline as to what constitutes a ‘national car’ and ‘non-national’ and without it, incentives can be abused. At the moment, the term ‘national car status’ is subjective, and is interpreted and understood differently by various parties, even by different authorities.

Incentives should only be given to a ‘national car’ to keep prices competitive for the public, while investments are made for fully-born Malaysia-made vehicles, if that is still the drive.

NAP 2 has failed to increase Bumiputera participation in the dealership network as well as preserving a specific segment for Proton market share, which was part of its objectives. There is also no report available on the achievements of NAP 2 in its entirety.

Incentives for Proton is not about protecting Proton, but should be given as a reward to acquire future technology for Proton to produce reasonable and competitively-priced Malaysia-made vehicles instead of rebadging.

We cannot compare Malaysia to Thailand and Indonesia, because our population is only one-third, if not less than Thailand as well as Indonesia’s car buying population. If we want our national car to succeed, the government must provide a more prominent policy.

Cheaper cars can be attained either with better economies of scale by preserving certain segment for certain car models that are researched, designed and built/produced in Malaysia, or through rebadging of cars without hefty R&D investment, like Perodua. The current policy is encouraging the Perodua business of rebadging.

PEDA welcomes all efforts and policies for cheaper cars, but incentives should be given to manufacturers that produce made-in-Malaysia vehicles from their own R&D. This is the essence of the ‘national car’ project.

PEDA lauds the establishment of the Malaysia Automotive Council (MAC), but appeals to the council to include all in the automotive eco-system – banks, association of used car dealers, vendors association and association of dealers representatives – to be part of the council. This is important to achieve NAP 2014’s objectives of promoting a competitive and sustainable domestic automotive industry.

PEDA is also disappointed that there was no directive for Malaysia automotive manufacturer/distributor/assembler(s) to conform to the New Car Assessment Program (NCAP) and elevate our motor vehicle safety standard.

Proton has conformed and complied with the NCAP, but most other manufacturers as per the list displayed on JPJ’s website have been given a waiver and exemption, and are profiteering from a cheaper cost of production at the cost of public safety.

PEDA disagrees with the voluntary inspection for vehicle proposal for vehicles older than five years. No one would want to volunteer and pay extra for an inspection in the light of the rising cost of living. If an inspection is necessary, it should be mandatory.

Perhaps insurance companies or banks can bear the cost of inspection when car buyers renew their annual insurance policies, as part of the insurer’s measure to safeguard its asset. The government can also reduce the insurance policy premium for cars that have passed the mandatory inspection.