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According to Datuk Aishah Ahmad, the Vehicle End of Life policy is important to ensure the growth of the automotive industry, which in turn, can contribute to taxes paid to the government. The Malaysian Automotive Association (MAA) president told Utusan that the automotive sector can provide an estimated RM6 billion a year in taxes to the government, and should not be dismissed lightly.

“The Vehicle End of Life policy is important to encourage the purchase of new cars, increasing the demand in the industry. At the same time, banks should also make vehicle loans easier to obtain to ensure the success of the industry,” said Aishah. Last year, Malaysia Automotive Institute (MAI) CEO, Mohamad Madani Sahari said that suggestions to implement such a policy through a Cash for Clunkers scrappage scheme was being considered.

The scheme would allow owners of vehicles aged 10 years or more to obtain a rebate of up to RM5,000 when they trade in their vehicles (regardless of brand) for a new one from any local OEM producer. However, the plan has been in left in a state of limbo since then, with Minister of International Trade and Industry Datuk Seri Mustapa Mohamed saying “the public is not ready” for such a scheme or policy, although he did not elaborate at the time.

Aishah’s statement comes following the MAA’s negative forecast on the local automotive industry, where it projected a 2.5% drop in vehicle sales for 2016, amounting to 650,000 vehicles. This is in spite of record 2015 numbers, where 666,674 vehicles were shifted. The depreciating ringgit and tighter lending policies of banks were cited as factors that will disrupt the industry’s Total Industry Volume (TIV).

At the MAI’s 2014/15 review and insight on the local automotive landscape, it suggested that a Cash for Clunkers scheme could increase TIV to 750,000 units. Aside from the Vehicle End of Life policy, Aishah also suggested introducing new incentives to encourage the growth of the Energy Efficient Vehicles (EEV) in the country.