Malaysia Budget

  • Budget 2021 – all auto and transport-related points

    Budget 2021 – all auto and transport-related points

    The Malaysian Budget 2021 (Belanjawan 2021) will be tabled by finance minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz in parliament at 4.00 pm today. As usual, we will be monitoring the speech for any automotive- and transport-related matters – will there be any further aid on these fronts going into next year? We will be posting live updates on any announcements made on these here, so be sure to tune in later.

    UPDATE:There were no directly-related auto-related matters, but all relevant transport topics have been included in the story.

    No automatic loan moratorium extension

    • With banks reporting that 85% of lenders are resuming payments after the blanket moratorium expired on September 30, the government is not extending the loan moratorium scheme.

      However, banks are allowing Bantuan Sara Hidup (BSH) recipents in the B40 category who have trouble repaying their loans to choose from two options, either by going for a three-month moratorium or by reducing their monthly installment payments by half for six months. Eligible borrowers will only need to contact their banks to choose the options and complete the documentation.

      Meanwhile, those in the M40 category can rework their financial packages through a self-declaration process if they experience an income reduction. The facility for both B40 and M40 will be available from December 2020.


    • RM1.3 billion will be spent to improve roads in the country, with the implementation of rural and interstate road projects totalling 920 km, which will benefit 290,000 people.
      Additionally, RM3.8 billion will be allocated for the implementation of a number of projects. These are:

    • Phase two of the construction of the Klang third bridge in Selangor.
    • Continuing the 325 km-long Central Spine Road (Kuala Krai–Kuala Pilah highway) with the new alignment from Kelantan to Pahang.
    • Upgrading the bridge across Sungai Marang in Terengganu.
    • Upgrading the federal roads linking Gerik, Perak to Kulim, Kedah.
    • To continue building and carrying out upgrading work on the Pulau Indah ringroad phase three in Klang.
    • Continuing the construction of the Serusop to Pituru package of the Sabah portion of the Pan Borneo Highway.
    • Continuing the construction of the Cameron Highlands bypass road.

    Public transport

    My30 unlimited travel pass

    • The My30 unlimited public transport travel pass programme, which was introduced in June, will be continued and will be expanded to Penang and Kuantan. The goverment is allocating RM300 million for this.

    RM5 unlimited KTM travel pass for primary/secondary students and the disabled

    • An unlimited access monthly travel pass priced at RM5 a month will be introduced for students in Standard One to Form Six as well as for the disabled. They will be able to utilise the pass for travel on the Klang Valley komuter lines as well as the inter-city service between Kuala Lipis and Tumpat in the peninsular and the Beaufort and Tenom line in Sabah.


    • The stage bus service transformation programme is being implemented in Kangar, Seremban, Ipoh and Kuala Terengganu, and will be then expanded in phases to Johor Bahru, Kuching, Kota Kinabalu and Kuantan, with RM150 million allocated for the programme.
    • To ease the burden on bus operators, the government has announced a sales tax exemption on all new locally-assembled, air-conditioned bus purchases in the country for a period of two years, beginning from January 1, 2021 to December 31, 2022.


  • Budget 2020 – all auto and transport-related points

    Budget 2020 – all auto and transport-related points

    The Malaysian Budget 2020 (Bajet 2020) will be tabled by finance minister Lim Guan Eng at 4.00 pm today. Stay tuned for possible news on related items such as tolls, fuel prices, public transport, road networks, etc – we will be posting live updates on any automotive- and transport-related announcements made in his speech here.

    UPDATE: Story now contains all relevant transport/auto-related points covered in the Budget.

    Toll collection

    • A minimum reduction of average toll charges by 18% discount will be introduced across all PLUS highways. This is expected to save North South Highway users up to RM1.13 billion next year, and a total of RM43 billion over the entire concession period until 2038.
    • The toll rate for the Second Penang bridge will be reduced to RM7 from RM8.50 from January 1, 2020.
    • The cabinet has approved the proposed offer to acquire four Klang Valley highways – the Shah Alam Expressway (KESAS), Damansara-Puchong Expressway (LDP), Sprint Expressway and SMART Tunnel – to be funded via government-guaranteed borrowings.

      The government says the introduction of congestion charges that will be lowered by up to 30% of the present toll rates during near peak and normal hours and free during off-peak hours will provide a savings to the highway users nearly RM180 million a year, or RM2 billion over the respective concession periods.


    Petrol subsidy programme (PSP)

    • The recently-announced RON 95 subsidy scheme will be introduced in Peninsular Malaysia in January 2020. The petrol subsidy programme (PSP) will have two eligible categories.

      The first is for eligible recipients of the cost of living aid (BSH) – the petrol subsidy receivable will be RM30 per month for car owners and RM12 per month for motorcycle owners. This subsidy will be in the form of cash transfer, deposited into the recipient’s bank account every four months. The first payment will be made in April 2020.

      The second covers all other motorists who are not BSH recipients – they will receive a special Kad95 which will allow them to enjoy subsidy on RON 95 petrol at a discount of 30 sen per litre, limited to 100 litres per month for cars or 40 litres per month for motorcycles. The Kad95 will be implemented progressively during the first quarter of 2020.

      Once the PSP is introduced, RON 95 retail prices will be gradually floated. The fuel subsidy will kick-in whenever the RON 95 market price, determined by the Automatic Pricing Mechanism (APM) is above RM2.08 per litre but no fuel subsidy will be given when the market-determined APM price falls below RM2.08 per litre.

    • RM2.2 billion has been allocated for the PSP, which will benefit more than eight million motorists.

    B20 biodiesel

    • The government will implement the use of biodiesel B20 for the transport sector, starting from the end of 2020. Expected volume is 500,000 tonnes a year.


    • RM1 billion will be spent to improve roads in the country, with RM326 million being allocated for Sabah and RM224 million for Sarawak.
    • Work continues on the Pan Borneo Highway, but the government says that it has saved RM1.2 billion in costs for the project.
    • RM50 million will be allocated for the repair and maintenance of roads leading to Port Klang.

    Autonomous vehicle pilot project

    • The government will set up a contestable grant fund to spur more pilot projects on digital applications, which will also include autonomous vehicles.

    Public transport

    Unlimited access monthly pass


    • The government intends to invests RM450 million to acquire up to 500 electric buses of various sizes for public transport in selected cities nationwide.
    • The government will further support last-mile connectivity in rural and urban areas by subsidising bus operators with an allocation of RM146 million next year.


    • The government intends to proceed with the Rapid Transit System (RTS) between Johor Bahru and Singapore. No timeline for its implementation was given.
    • The rail tracks from Gorge Line between Halogilat Station to Tenom Station in Sabah will be upgraded at a cost of RM50 million
  • Budget 2019 – all auto/transport-related points

    Budget 2019 – all auto/transport-related points

    Malaysian Budget 2019 (Bajet 2019) will be tabled by finance minister Lim Guan Eng at 4.00 pm today. We will be posting live updates on any automotive- and transport-related announcements from his speech here.

    UPDATE: Story now contains all relevant transport/auto-related points covered in the Budget.

    Toll collection

    • The government will put a freeze on any toll price increase on all inter-city highways in 2019, at a cost of RM700 million.
    • Toll collection for motorcycles will be abolished for both Penang bridges and the Second Link to Singapore beginning from January 1, 2019, at an estimated cost of RM20 million.

    Targeted fuel subsidy for RON 95

    • This will benefit four million car owners and 2.6 million motorcyclists, and will be introduced sometime in the second quarter of 2019. To cost the government RM2 billion a year.

      The scheme will provide a 30 sen subsidy per litre (depending on the price of petrol) limited to 100 litres a month for cars with an engine displacement capacity of 1,500 cc and below, and 40 litres for motorcycles with an engine displacement capacity of 125 cc and below.

      The mechanism of distribution has not been elaborated on, but it was announced that owners with multiple cars will not receive this benefit. Also, RON 95 pricing for non-subsidised vehicles will be set according to a managed float when the programme begins. Diesel was not mentioned.

    B10 biodiesel

    • Introduction of biodiesel B10 programme for the transportation sector to begin in 2019.


    • RM10 million to be allocated to upgrade the Autogate Malaysia Automated Clearance System and M-Bike at both the Johor causeway and the Second Link to ease congestion issues.
    • Work will continue on the Pan Borneo Highway encompassing Sabah and Sarawak, subject to a cost rationalisation exercise.

    Public transport
    Unlimited access monthly pass

    • The government will allocate RM240 million for the introduction of an unlimited access monthly pass priced at RM100 for public transport commuters, beginning from January 1, 2019. This will allow unlimited use on all city rail services and RapidKL bus services. A RM50 unlimited access monthly pass for RapidKL bus-only travel will also be available, but the campaign will be expanded to other bus companies at a subsequent stage.

    MRT 2

    • To continue, cost reduced from RM39.3 billion to RM30.5 billion, representing a savings of 22.4%, or RM8.8 billion.

    LRT 3

    • To continue, cost reduced from RM31.6 billion to RM16.6 billion, representing a savings of of 47%, or RM15 billion.

    Klang Valley double-tracking 2 project

    • The project, which was awarded via direct negotiations just before the last general election for RM5.2 billion, has been scrapped, and will now be subject to a new bid carried out via an open tender exercise.


    • Prasarana to improve its bus network by fully utilising and optimising its current fleet of 1,131 RapidKL, 408 RapidPenang, 69 RapidKuantan and 300 MRT feeder buses. The company will also work in partnership with other existing bus companies to manage routes and services.
    • Kuala Lumpur city hall (DBKL) will allocate RM20 million next year to provide additional free GoKL free bus services from the existing four routes to further improve public transport coverage in Kuala Lumpur.
    • A sum of RM500 million will be made available for a public transport loan fund with 2% interest subsidy via Bank Pembangunan Malaysia, and this will be available to taxi and bus companies as well as other public transport operators.


    • An allocation of RM2.46 billion will be provided for the upgrading and restoration works of railway tracks across the country.
  • Malaysia Budget 2018 live updates (auto/transport)

    Malaysian Budget 2018 (Bajet 2018) will be announced by Prime Minister Datuk Seri Najib Tun Razak at 3.30pm today. We will be posting live updates on any automotive- and transport-related announcements from his speech here. Will there be any extra incentives for energy efficient or electric vehicles, or perhaps more budget allocations for roads and public transport?

    Toll collection
    No more toll collection at selected toll booths from January 1, 2018

    • Batu Tiga, Shah Alam
    • Sungai Rasau, Selangor
    • Bukit Kayu Hitam, Kedah
    • Eastern Dispersal Link, Johor

    West Coast Expressway

    • Taiping to Banting
    • Currently under construction at a cost of RM5 billion

    Central Spine Road (or Kuala Krai–Kuala Pilah Highway)

    • RM230 million to continue the construction of project
    • Raub to Bentong; Gua Musang, Kelantan to Kampung Relong, Pahang

    Bridge to Labuan

    • Feasibility study underway to link Labuan to Tanah Besar, Sabah

    Pan Borneo Highway

    • RM2 billion allocation
    • Eleven construction packages already distributed
    • Five out of 35 Phase 1 packages in Sabah have been awarded

    Expansion of road network

    • RM934 million to build roads in rural areas nationwide, including RM500 million allocation to Sabah and Sarawak
    • RM1.1 billion to build/upgrade bridges, street lamps, surau and markets

    Public transport
    New East Coast Rail Link linking Port Klang to Pengkalan Kubor, Kelantan

    • Transport cargo and passengers between two locations within four hours
    • Construction works will begin from January 2018
    • RM110 million to prepare alternative roads to Port Klang

    MRT 2 (Sungai Buloh-Serdang-Putrajaya)

    • 52 km distance covering 37 stations
    • Estimated cost of RM32 billion

    MRT 3 (Circle Line)

    • Estimated to completed ahead of schedule by 2025, instead of 2027

    LRT 3

    • Linking Bandar Utama to Johan Setia, Klang
    • Estimated to be completed by February 2021

    High-Speed Rail

    • Linking Kuala Lumpur to Singapore
    • 350-km journey in just 90 minutes
    • Estimated to benefit the rakyat by 2026


    • RM45 million to implement a biometric control system to oversee express bus services


    • Registered taxi drivers who switch to e-hailing will receive a RM5,000 grant to purchase a new car

    Building/upgrade/expansion of new/existing airports

    • Penang and Langkawi international airports to be upgraded
    • New airport to be built in Mukah
    • Expansion of Kota Bahru and Sandakan airports
    • Feasibility study to build a new airport on Pulau Tioman
  • Malaysia Budget 2017 live updates (auto/transport)


    Malaysian Budget 2017 (Bajet 2017) will be announced by Prime Minister Datuk Seri Najib Tun Razak at 4pm today. We will be posting live updates on any automotive- and transport-related announcements from his speech here. Will there be special incentives for first-time car buyers or electric vehicles?

    Auto/transport updates:

  • The limit for motorcycle loans for civil servants has been increased from RM5,000 to RM10,000.
  • A total of 97,000 street lamps will be erected, including 3,000 LED street lamps at junctions. This will involve 7,500 kampungs nationwide, including in Sabah and Sarawak.
  • An allocation of RM1.2b for the building and upgrading 616 km of kampung roads and bridges to improve connectivity with towns.
  • To maintain state roads, a total of RM4.6 billion will be allocated to all states under the Malaysian Road Records Information System (MARRIS).
  • A RM5,000 grant for taxi drivers to purchase new vehicles, plus the offering of individual taxi permits. An allocation of RM60 million has been set aside for this. This will benefit 12,000 cabbies who have ended lease contracts with taxi companies.
  • The government is encouraging the B40 group to increase income by joining ride-sharing app companies (Uber, Grab). For those who do not own a vehicle, downpayment can be made using BR1M and a RM4,000 rebate will be provided for the purchase of a Proton Iriz.
  • An allocation of RM29 million for the upgrading of drainage and two overhead ramps for the Federal Highway motorcycle lane.
  • To stimulate private investment, infrastructure projects such as Jalan Lok Kawi-Pengalat-Papar in Sabah, and Jalan Kg Keruak-Gua Musang-Kuala Berang to be carried out. Also, Batang Lupar bridge in Sri Aman.
  • To ramp up the construction of the Pan Borneo Highway between Sabah and Sarawak.
  • A RM55 billion East Coast Rail Line will be built – 600 km-long from Klang Valley to the East Coast. Starts from Port Klang and will pass by Gombak, Bentong, Mentakab, Kuantan, Kemaman, Kerteh, Kuala Terengganu and Kota Bahru. Terminates in Tumpat.
  • A RM100 million allocation for the repair of the Gua Musang-Tumpat train line.
  • Nineteen new train sets for the ETS train service, in stages till 2019.
  • An allocation of RM114 million for the building of rural roads in Sarawak.
  • 6.30 pm – The Budget 2017 presentation by PM Datuk Seri Najib Tun Razak has concluded. The above are the transport-related points, but there was nothing about the reported “first time car buyer scheme” or incentives for electric vehicles.

  • Malaysia Budget 2016 live updates (auto/transport)

    Bajet 2016 02

    Malaysian Budget 2016 (Bajet 2016) will be announced by Prime Minister Datuk Seri Najib Razak at 4pm today. We will be posting live updates on any automotive-related announcements from his speech here.


    • Improvement of logistical infrastructure, including the Damansara-Shah Alam Elevated Highway (DASH), Sungai Besi-Ulu Klang Elevated Expressway (SUKE), Pulau Indah Expressway and Central Spine Road highway.
    • RM900 million for Jalan Tun Razak Traffic Dispersal Programme, to reduce traffic along the road.
    • To study the construction of a coastal highway between Masjid Tanah to Klebang and from Klebang to Jambatan Syed Abdul Aziz in Melaka.
    • RM42 million to build Mukah Airport in Sarawak, and to renovate airports in Kuantan and Kota Bharu. Studies will also be made to improve the airport in Batu Berendam, Melaka.
    • A more efficient public transport system for those outside major cities.
    • LRT Ampang Line, 18.1 km, to be ready in March 2016. LRT Kelana Jaya Line, 17.4 km, to be ready in the middle of 2016. Both projects are worth RM10 billion.
    • MRT Sungai Buloh Line-Semantan will be ready in December 2016. Phase two, Semantan-Kajang will be ready mid-2017. Total 51 km, worth RM32 billion.
    • MRT2 Sungai Buloh-Serdang-Putrajaya, total 52 km, to benefit 2 million residents. Costs approximately RM28 billion. Initial work will begin in Q2 2016, completed by 2022.
    • LRT3 Bandar Utama, Damansara-Johan Setia, Klang, total 36 km, to benefit 2 million residents. Costs approximately RM10 billion. Initial work will begin in 2016, completed by 2020.
    • Kuala Lumpur-Singapore High Speed Rail discussions to continue with Singapore.
    • Bus Rapid Transit (BRT) KL-Klang project to go ahead, worth over RM1.5 billion. New BRT Kota Kinabalu, RM1 billion.
    • Upgrade works of rural road network, total 700 km, worth RM1.4 billion. Also, improvements of roads around FELDA settlements, RM200 million.
    • Road network coverage outside major cities have been expanded to 51,000 km, from 46,000 km in 2009.
    • Sarawak Pan Borneo Highway, total 1,090 km, to be completed by 2021, worth approximately RM16.1 billion. Phase one of this project in Sabah to begin in 2016, total 706 km, from Sindumin to Tawau, worth RM12.8 billion.
    • Pan Borneo Highway will be toll free.
    • Rural Air Services in Sabah, Sarawak and Labuan to be exempted from GST.
    • Addition of 500 PDRM patrol motorcycles and 500 patrol cars, worth RM35 million.

    5.45pm – And that’s it! Looks like there’s nothing concerning the automotive industry announced this time. You can read the PM’s speech in full below.

    So folks, what do you think of Budget 2016? Sound off your comments below.

  • Malaysia Budget 2015 Live Updates (Auto/Transport)


    Budget 2015 will be announced by Prime Minister Datuk Seri Najib Razak at 4 pm today. We will be posting live updates on any automotive-related announcements from his speech here. Watch this space for updates.


    • RON 95 petrol, diesel and LPG – NO GST
    • Subsidy rationalisation of petrol, diesel and LPG to be done in stages, government mechanism to be announced “in due time”


    • Construction of Sg Besi-Ulu Klang Expressway (SUKE), 59 km stretch, at a cost of RM5.3 billion
    • Construction of Lebuhraya Pantai Barat (West Coast Expressway) from Taiping to Banting, 276 km, at a cost of RM5 billion
    • Construction of Damansara-Shah Alam Expressway (DASH), 47 km, at a cost of RM4.2 billion
    • Construction of Lingkaran Luar KL to Hubungan Timur, 36 km, at a cost of RM1.6 billion
    • Construction of MRT Phase 2 Selayang to Putrajaya stretch, 56 km, at an estimated cost of RM23 billion
    • Construction of Pan Borneo Highway, 1,663 km (936 km in Sarawak, 727 km in Sabah), at a cost of RM27 billion
    • LRT3 project connecting Bandar Utama to Shah Alam and Klang, at an estimated cost of RM9 billion
    • To develop electric vehicle manufacturing industry, Sustainable Mobility Fund of RM70 million to be established under SME Bank – 50 electric buses to be introduced initially
    • Facilitation of Bas Antarabandar (inter-city bus services) for those who live outside the city but work in KL – routes are Rawang-KL, Klang-KL and Seremban-KL, monthly fare is discounted by 30%
    • Upgrading of stage bus services with existing bus operators in Kuching, Ipoh, Seremban, Kuala Terengganu and Kangar
    • Electric Train Service (Ipoh-Butterworth) to start in April 2015
    • Rural road upgrade project, 635 km, including trunk roads in Sabah and Sarawak, RM943 million allocated

    6.15 pm – The Prime Minister has finished his Budget 2015 speech.

  • Malaysia Budget 2014 Live Updates (Auto/Transport)

    Bajet 2014

    Budget 2014 was announced earlier by Prime Minister Datuk Seri Najib Razak. There was no mention of the status of the current tax exemption for hybrid/electric vehicles, which we’re discussing in a separate post. Here are other auto/transport-related points from the PM’s speech:

    • Transportation services such as bus, train, LRT, taxi, ferry, boat and highway toll will be exempted from Goods and Services Tax (GST), which is set at 6%, when GST begins on April 1, 2015.
    • The GST replaces sales tax and service tax. The current sales tax for cars is 10%. Does this mean that GST will reduce sales tax on cars by 4%?
    • A sum of RM980 million has been allocated to refurbish and upgrade 437 km of rural road networks nationwide. Additionally, RM500 million has been allocated for the Pan-Borneo Highway Project.
    • To address the shortage of parking lots at Hospital Kuala Lumpur (GH), a total of 1,950 new parking lots will be completed in 2014.
    • Providing ‘park-and-ride’ facilities at LRT, KTM Komuter and ERL stations with an allocation of RM62 million.
    • The implementation ofSistem Perkhidmatan Teksi Berpusat (centralised taxi service system) with an allocation of RM15.3 million, to ensure that taxis are distributed more efficiently to customers.
    • Construction of the 316-km West Coast Expressway project from Banting to Taiping.
    • Constructing the Ipoh to Padang Besar double-tracking project, and later, from Gemas to Johor Bahru as well as upgrading rail tracks across the country, with RM2.9 billion allocated.
    • Refurbishment of KTM Komuter EMU (Electric Multiple Units) trains with an allocation of RM28 million, to improve service reliability and frequency.
    • The building of city terminals (hentian akhir bandar) and the upgrading of bus stations in addition to drop-and-ride facilities with an allocation of RM28 million.

    Full Budget 2014 speech text here.

  • Budget 2013 – no auto-related matters announced

    Budget 2013 – no auto-related matters announced

    The just-concluded Budget 2013 speech made by Prime Minister Datuk Seri Najib Tun Razak didn’t include any news involving the auto sector.

    Last year, the biggest news was that the full import tax and excise duty exemption for hybrid/electric cars and motorcycles announced in Budget 2011 had been extended to Dec 31, 2013. Nothing was mentioned this year, presumably due to the fact that the incentive runs until the end of next year, so any announcement on a further extension can be made in the next Budget.

    Of course, making an announcement very early on would ensure that the industry can conduct proper stock and product planning, always a good thing. However, there may be no need to wait that long, because the upcoming National Automotive Policy (NAP) review by MITI is expected to cover all automotive-related matters, although when that will be revealed is not yet known.

    Back in April, it was reported that the final draft of the review was due to be presented to the Cabinet, and while no details were revealed, International Trade and Industry Minister Datuk Seri Mustapha Mohamad was quoted as saying that the review will push for a more liberal local market, among other things.

    Meanwhile, the market continues to face uncertainty as the buying public waits in anticipation of news of a possible reduction in car duties/taxes. The lack of any development in Budget 2013 means that speculation will continue, affecting sales. Certain dealerships are already reporting a drop in sales, by as high as 50%.

    Full text of Budget 2013 speech after the jump.
    Read The Full Story ›

  • Budget 2012: Other motoring and transport-related news

    Budget 2012: Other motoring and transport-related newsIt has certainly been a rather comprehensive budget. Aside from the announcements regarding the assistance for individual budget taxi owners and the continuation of incentives for hybrid cars until December 31, 2013, there were other items in Budget 2012 related to transport.

    Among these are the projects of the Second Rolling Plan (RP2) under the Tenth Malaysia Plan; 2012 will see the first year of implementation of these. The RP2 will be allocated RM98.4 billion, with RM49.2 billion each for 2012 and 2013.

    Under the RP2, the main projects to be implemented are the Gemas-Johor Bahru double tracking rail project, as well as a number of new expressways, these being the Lebuhraya Pantai Timur Jabor-Kuala Terengganu, Lebuhraya Pantai Barat Banting-Taiping, Lebuhraya Segamat-Tangkak and Lebuhraya Central Spine. Other core projects include the construction of the Kota Marudu-Ranau road and the redevelopment of the Sungai Besi KL air base.

    On the Rural Transformation Programme front, an allocation of RM5 billion will be provided in 2012 to strengthen the development of rural basic infrastructure – of this, RM1.8 billion is set to be spent on the Rural Road Programme and Village-Link Road Project, which will build a 2,479 km-long road network which will benefit 1.76 million people in rural areas.

    Meanwhile, the Pudu Raya Terminal, which is used by 80,000 people at any one time, has been renamed Pudu Sentral, following its complete facelift, which was carried out at a cost of RM40 million.

  • Budget 2011: other motoring and transport related news

    Budget 2011: other motoring and transport related news

    Besides the news of the removal of the 50% excise duty of hybrid vehicles in Paul’s earlier story, there were some other items related to motoring and transport in Budget 2011.

    Effective January 1 next year, the service tax on all taxable services will go up from 5% to 6%, which of course means that it’ll add to the cost of servicing and repairing your vehicle, among everything else that you can be expected to pay a service tax for.

    Better news for frequent users of the four highways run by PLUS Expressways Berhad – as a means of alleviating your burden, the toll won’t be raised for the next five years.

    As part of its plan to reduce the intensity of carbon emissions, the Government will also begin the implementation of its B5 programme – the blending of biofuel in diesel – on a mandatory basis in Putrajaya, Kuala Lumpur, Selangor, Negeri Sembilian and Melaka starting from June 2011.

    Elsewhere, some good news for the physically disabled who are able to drive – the current exemption of excise duty by 50% on the purchase of a national vehicle is now 100%, with all existing conditions for such a purchase remaining unchanged. The revised exemption, effective from October 18, is also extended to those with hearing and speaking disabilities.

    In terms of public transport, work on the Mass Rapid Transit rail system in the Klang Valley is slated to begin in 2011. The project, which is estimated to cost RM40 billion, is aimed at providing an efficient transport system that will reduce travelling time and offer better connectivity in the Klang Valley.

    The project will be integrated to other modes of transportation, including buses and taxis (it’ll be interesting to see how this one works – a definite overhaul is needed, for sure), and is expected to be completed by 2020. Upon its completion, the Government expects that the utilisation rate of public transport to increase by at least 40%.

    Meanwhile, rural roads get that much needed improvement – Sabah and Sarawak is to get an allocation of RM2.1 billion for the building and upgrading of rural roads, while RM696 million will be set aside for those in the Peninsular.

  • Budget 2010: what it means for Malaysian motorists

    Budget 2010 Logo

    Our PM Datuk Seri Najib Tun Razak has just revealed the annual budget for the year 2010, which is his first since taking office on April 3rd 2009. The RM191.5 billion budget would be the final budget under the 9th Malaysia Plan.

    The Government expects the economy to grow by about 3% next year. The premier revealed that the budget for 2010 will focus on the ‘rakyat’ and aims to turn the Malaysian economy into a high-income economy.

    Apart from unveiling various plans and measures to further improve the overall economy under the budget that is themed “1Malaysia, Together We Prosper”, the PM also briefly spoke about the local automotive industry and issues that relate to motorists.

    MyKad Petrol

    First of all – one of the most important things for motorists – the combustible stuff we put into our cars so they can move. The Prime Minister says the fuel subsidy currently given to the public is being utilized by people who don’t deserve the subsidy.

    The Government plans to introduce a fuel subsidy management system to determine the eligibility of a citizen, to find out whether she or she is eligible to enjoy the subsidy. The system is to be implemented in early 2010 and will incorporate the use of the MyKad. We’ve already saw a potential vendor demonstrating their ePetrol system at the WCIT 2008 (picture above). Not much other details regarding this was revealed.

    There will also be a implementation of a new insurance and Takaful scheme for motorists. According to the PM, right now the structure of the motor insurance scheme is rigid (premiums are fixed) and fails to take into account rising business costs and claims. So in mid-2010, a new system will be introduced that will include an affordable ‘basic’ insurance and Takaful scheme.

    The premium for the insurance will be figured at an ‘appropriate’ level and will be on par with the level of coverage. The scheme will provide mandatory coverage for bodily injuries and the death of a third party. Policy holders will also receive their compensation expeditiously without delays. I have a nagging feeling that this means the cost of entry to get a motor insurance policy will be low but to get the same amount of coverage we enjoy now, we’ll be paying higher prices.

    Also announced is a RM10,000 price tag for an Open AP (Approval Permit). The change will be implemented on January 1st 2010 and a portion of the proceeds will be channeled to the automotive sector of Malaysia’s “Dana Pembangunan Bumiputera”. Four years ago in 2005, a total of 17,526 Open APs were issued. If the figure is used as a gauge, the Government can potentially earn over RM175 million. I wonder how the grey importers will deal with this new cost to them – will the buck be passed onto customers?

    There was nothing revealed on the National Automotive Policy review in the Budget so we’ll have to continue waiting for updates on that issue.

    Look after the jump for the full Budget 2010 text.
    Read The Full Story ›

  • Budget 2009: what it means for the motorist

    There are only two announcements made during the unveiling of the Budget 2009 yesterday that directly applies to motorists. One is a change in the road tax structure for diesel cars. Effective from the 1st of September 2008, the road tax rates for diesel cars will be changed to be the same as petrol cars.

    Isuzu DmaxI am not sure whether this is really good news or not because for an owner of the Isuzu D-MAX 3.0 who previously had to pay RM1,878.10 for individual private registration (according to Isuzu Malaysia’s website) for his truck equipped with a 2,999cc engine, he now may have to pay over RM2,000 for his road tax (typical for a 3.0 litre petrol engine). Unless of course they are still keeping the significant green engine discount, then the new rates will be cheaper.

    Civic Integrated Motor AssistThe other thing revealed during the budget presentation was the abolishing of 100% import duty and 50% excise duty for hybrid cars imported by franchise holders with engine displacements lower than 2,000cc.

    What I like is the barriers that the government has put around this to prevent “loopholes” as it would rule out all the “luxury hybrids” out there (including the 2.4 litre Camry Hybrid and the collection of hybrid Toyota MPVs) and narrow it down to cars like the Civic Hybrid and the Prius which have small engines assisted by electric motors. Only allowing franchise holders (and not Open AP holders, grey importers) to have this tax exemption would only let genuine importers who will back their cars like Honda Malaysia Sdn Bhd.

    The tax exemption will be affective from the 30th of August 2008 to the 31st of December 2010 (slightly more than 2 years). The government has also defined what is a hybrid car. It says a hybrid car should be “a vehicle with at least two different energy converters and two different energy storage systems (gasoline and electric), on-board the vehicle for the purpose of vehicle propulsion.” It should also achieve not less than a 50% increase in city fuel economy OR not less than a 25% increase in combined city-highway fuel economy compared to an equivalent vehicle with a regular internal-combustion engine. Carbon monoxide emissions must be less than 2.3 g/km.

    As mentioned above, this tax exemption will only be in effect for the next 2 years. The rational given by the government is that they want to encourage local assembly of hybrid cars. Allowing cars to be brought in at prices to simulate local assembled prices for a short period of time will allow car manufacturers to gauge public acceptance of hybrid cars so that they can take into consideration local assembly.

    Whether this will work or not is not known – hybrid cars are complicated things and there could be a reason why hybrid cars usually come from a centralise production center in a world. Only when the Toyota’s Hybrid Synergy Drive achieved major success did Toyota decide to set up more hybrid production centers around the world, one of which will be up north in Thailand. The others will be in Mississippi, Australia and China.

    Honda Malaysia Sdn Bhd has announced that it welcomes the new “temporary” tax structure and it would be announcing the Honda Civic Hybrid’s new pricing soon. The Honda Civic Hybrid currently costs RM162,800 OTR with insurance in the Peninsular Malaysia. In Langkawi, it costs RM100,800 and RM104,800 in Labuan.

  • Budget 2007 for the automotive industry

    All of us have at least some reason to be glad with the new Budget 2007. The absurd idea of scrapping motor vehicles above 10/15 years of age was not implemented in the budget, not at least for this year. So we’re safe for another year. Let’s have a look at what the Budget 2007 brings, in relation to motorists/the automotive industry:

    • Underdeclaration of motor vehicles will be taken very seriously. If caught, a minimum compound of 5 times total tax payable to be imposed. Enforcement capacity of Customs will be increased.
    • Biodiesel fund of RM500 million to develop the bio-diesel industry.
    • RM19 billion to be allocated for fuel subsidy and tax foregone, which is higher than the previous RM16 billion figure. If next year’s oil prices remain around the US$70 per barrel range, subsidies and tax foregone should remain at current levels, which means there should be no reason for any huge petrol price increases.

    We’re safe for now. The government’s decision to cut corporate tax rates from 28% to 27% for 2007 and 26% for 2008 pushed Proton share prices up by 5.3% to RM5.20.


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Last Updated Jul 25, 2024