Honda-Jazz-Hybrid

At today’s National Automotive Policy (NAP) 2014 status update, Minister of International Trade and Industry (MITI) Datuk Seri Mustapa Mohamed told the press that, as yet, there are no plans for the current import and excise duty exemptions for locally-assembled hybrid vehicles to be extended beyond December 2015.

Incentives for CBU hybrids (with a engine capacity limit of 2.0 litres) and EVs were terminated with the introduction of NAP 2014 early last year, but those for CKD vehicles (this time without an engine size cap) continued to be doled out, with an end date set for the end of this year.

This presents quite the conundrum – the previous-gen Honda Jazz Hybrid, Mercedes-Benz S 400 L Hybrid and E 300 BlueTEC Hybrid and Nissan Serena S-Hybrid are already being assembled here, while the Toyota Camry Hybrid and Honda City Hybrid and new Jazz Hybrid are expected to come in sometime later this year.

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As such, the industry players who are already involved in this scheme will no doubt be looking for a meaningful return of their investment in the country. And while there is still time for an extension to be announced, such late notice would not give manufacturers enough room to plan out their product introductions, usually occurring about a year in advance.

One way we could see this pan out would be that the benefits for those who are already assembling hybrid vehicles in Malaysia would be grandfathered – meaning that the prices of those cars will remain the same even beyond 2015 – while the door would be closed for any new entries.

Another alternative would be that the incentives would remain open on a case-by-case basis, for example through the country’s Energy Efficient Vehicle (EEV) policy. Either way, the insecurity this development brings isn’t likely to sit well with the car manufacturers.

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