NAP 2020 Archive

  • NAP 2020 is the future but government shouldn’t ignore current uncertainties facing the industry – MAA

    The National Automotive Policy 2020 (NAP 2020) was officially launched last Friday by prime minister Tun Dr Mahathir Mohamad. It aims to push the country towards becoming a regional leader in automotive manufacturing, engineering and technology, and is very much an enhancement of NAP 2014, expanding on the outlines seen previously.

    In a nutshell, NAP 2020 consists of three directional thrusts and three strategies as well as seven roadmaps/blueprints to be implemented to the year 2030. The directions include a focus on Next Generation Vehicles (NxGVs), Mobility as a Service (MaaS) and Industry 4.0, and the plan will incorporate the development of Automated, Autonomous, Connected Vehicles (AACV), light weight material tech as well as hybrid, electric and fuel cell vehicles.

    What do the car companies think of it? We’ve heard from a couple of individual carmakers, but here’s what the Malaysian Automotive Association (MAA), the umbrella body for all car companies in Malaysia, has to say. Asked by The Star, MAA president Datuk Aishah Ahmad agrees on the direction NAP 2020 is pointing to, but urges the government to not just look into the future, but look at present issues as well.

    “Overall, I think the NAP 2020 is the future and is in line with the global trends. ASEAN countries are also focusing on the future trends. They’re looking at the next generation of vehicles,” she said.

    “Where I’m pleased is the fact that the ministry will be taking a step-by-step approach as they start introducing next generation vehicles and new technology. Because if we’re not ready, implementing anything too soon will not be good for the industry,” Aishah added.

    However, the MAA head also urged the government to focus on current issues faced by the automotive industry. And there’s no bigger issue than the uncertainty brought about by the recently introduced new methodology of how the open market value (OMV) of a vehicle is calculated. OMV is the final market value of a CKD car ex-factory, before the government imposes excise duties on it, with profit margin and sales tax to top things off.

    An assortment of components determine the OMV, and these include the cost of the CKD pack, cost of manufacturing and components as well as assembly and administration charges. However, the Excise (Determination of Value of Locally Manufactured Goods for the Purpose of Levying Excise Duty) Regulations 2019 – prepared by the MoF and gazetted on December 31, 2019 – sought to add new components into the OMV calculation.

    Under the new regulations, the computed value to determine duties will now take into account not just the profit and general expenses incurred or accounted in the manufacture of a vehicle (ex-factory), but also of its sale.

    The “and sale” clause also now applies to areas such as advertising and marketing, warranty and trade royalty, plus wages and commission. Also included are general and administrative expenses such as rental, utilities and office supplies, among other costs. Naturally, this raises the OMV and applicable excise duty.

    On January 22, the finance ministry gave a special exemption that essentially maintains the car price status quo for 2020. It remains to be seen what will happen next year, but the government says that any increase will be gradual.

    “The present concerns that we have are the policies to excise duty hikes. It’s been held back for this year but what about beyond that? That creates uncertainty for the industry,” Aishah stressed, adding that the new tax structure would have hiked up CKD car prices by up to RM33,000. “What we’d like to reiterate to the government is to not ignore the present situation,” she urged.

    On the day that Aishah announced the MoF’s exemption for this year, she said that had the reprieve not happened, it would have been bad news for the auto industry, which already faces a challenging environment. Aishah said that the association’s members, some of whom have invested heavily in assembly operations in Malaysia, would have had to rethink their plans for our market.

    “Had the new OMV been implemented, a lot of investors would have second thoughts on investing in Malaysia. Even our local car companies that have been heavily investing in CKD operations would have to think again. Maybe they will decide to bring in CBU (fully imported cars) – why do you invest so much and yet it’s not competitive. That’s how I look at it,” she said then.

    Aishah and MAA council members also said that the industry was not consulted prior to the release of the new OMV gazette, despite being in active talks with the government on other matters. Datuk Zainal Abidin Ahmad, president and CEO of Perodua, had also said that the Malaysian market leader was not consulted on the matter.

    At the launch of NAP 2020, minister of international trade and industry Darell Leiking urged naysayers to “work together” with the government for the betterment of the industry, which contributes 4% to the country’s gross domestic product (GDP). Perhaps more engagement between the auto industry, MITI and crucially, the finance ministry, would be good for all. More on the NAP 2020 here.

     
     
  • Incentives for hybrids, PHEVs, EVs yet to be finalised

    Today’s launch of the National Automotive Policy (NAP) 2020 featured little in the way of concrete details, with the Ministry of International Trade and Industry (MITI) painting broad strokes regarding its ambitions for the next ten years. Notably, it left out any mention of incentives or tax breaks for electrified vehicles, and when asked, deputy minister Ong Kian Ming said that the minutiae have not been finalised just yet.

    “The incentives will be discussed in the one of the seven roadmaps that we’re rolling out, and everything will be put into context within the Automotive Business Development Council (ABDC) where all incentives are processed together with all the stakeholders,” he said. “So we’re not at the point where we can announce those incentives yet.”

    Prime minister Tun Dr Mahathir Mohamed sidestepped a question regarding whether the government will standardise the incentives currently customised to each carmaker that assembles its vehicles locally. Instead, he simply said that the administration needs to give the public what it wants, and it has to invest accordingly.

    The plan revealed today, an evolution of NAP 2014, features seven roadmaps in the field of Next Generation Vehicles (NxGVs), Mobility as a Service (MaaS) and Industry 4.0. The plan will also incorporate the development of Automated, Autonomous, Connected Vehicles (AACV), lightweight material technology as well as hybrid, electric and fuel cell vehicles. Read more here.

     
     
  • Mercedes-Benz Malaysia welcomes NAP 2020’s vision to develop next-gen vehicles, higher automation levels

    The National Automotive Policy 2020 (NAP 2020) was officially launched in KL this morning by prime minister Tun Dr Mahathir Mohamad. It aims to push the country towards becoming a regional leader in automotive manufacturing, engineering and technology, and is very much an enhancement of NAP 2014, expanding on the outlines seen previously.

    In a nutshell, NAP 2020 consists of three directional thrusts and three strategies as well as seven roadmaps/blueprints, which will be implemented to the year 2030. The directions include a focus on Next Generation Vehicles (NxGVs), Mobility as a Service (MaaS) and Industry 4.0, and the plan will incorporate the development of Automated, Autonomous, Connected Vehicles (AACV), lightweight material tech as well as hybrid, electric and fuel cell vehicles.

    A number of car companies have released official statements regarding the introduction of the policy, and Mercedes-Benz Malaysia (MBM) is the latest to do so. In a statement, the brand said it is pleased that NAP 2020 is a positive enhancement to the NAP 2014, as it aims to make Malaysia a regional automotive leader.

    “The development and production of EEVs and NxGV with increased levels of automation is an explicit encouragement by the government on future mobility in Malaysia and we see the NAP benefitting all players in the automotive industry,” said MBM president and CEO Claus Weidner.

    “For Mercedes-Benz globally, Ambition 2039 is our strategic path towards sustainable mobility, and we aim to increase the adoption in Malaysia by delivering sustainable and fascinating mobility to our customers,” he added.

     
     
  • NAP 2014 report card – RM10.05 billion investments, 62% TIV EEV penetration, RM58.7 billion local content

    Today marks the launch of the new National Automotive Policy (NAP 2020), which enhances upon the previous NAP 2014. It’s been a long wait for the ministry of international trade and industry (MITI) to finalise and present the latest NAP, but before we look towards what comes next, let’s take a step back and examine what has emerged in the time NAP 2014 was in effect.

    First announced in January 2014, the NAP 2014 was focused on developing Malaysia as the hub for Energy Efficient Vehicles, or EEV. At the time, EEV specifications were revealed for the first time, while customised incentives would be given for EEV-related foreign and domestic direct investments (FDI and DDI).

    At the time, MITI also revealed a number of targets for the NAP 2014, but have any of them been met or even exceeded? We compare the data from MITI’s official NAP 2020 booklet to see what’s what.

    Gross domestic product (GDP) contribution

    According to MITI, local automotive manufacturing has contributed RM48.6 billion to the national GDP from 2014 to 2018. The ministry revealed during the initial implementation of the NAP 2014 that is was targeting automotive manufacturing to account for 10% of national GDP by 2020, but as this year’s GDP figures aren’t out yet, it’s not known if that goal was met.

    Total industry volume (TIV) and total production volume (TPV)

    When the NAP 2014 was announced, the target for TIV was to hit one million units by 2020, which includes passenger and commercial vehicles as well as motorcycles. This goal has been met consistently from 2014 to 2018, with the exception of 2016.

    As for TPV, which accounts for the aforementioned vehicles, the NAP 2014’s target was 1.35 million units by 2025. From 2014 to 2018, TPV hovered between 900,000 and just over a million units, never reaching close to the allotted target.

    Exports

    The total worth of CBU units that left the country saw a huge spike in 2018 to RM2.08 billion, which is double that in 2017, and marked the end of continuous downward slump from RM1.5 billion in 2014 through 2017.

    Additionally, RM12.1 billion worth of new automotive parts components were exported in 2018, up from RM4.7 billion in 2014, and significantly exceeding the NAP 2014’s target of RM10 billion by 2020.

    Another area of exports is remanufactured automotive parts and components, with the NAP 2014 aiming for RM 2 billion by 2020. However, from 2014 to 2018, only RM523.1 million worth of these products have been recorded, which is a quarter of the intended target set previously.

    Employment

    Based on MITI’s NAP 2020 booklet, a total of 244,941 job opportunities have been created from 2014 to 2018, which is far more than the 177,520 employment opportunities the NAP 2014 set out to achieve when it was announced. At the time, only two aspects of automotive employment were considered, which are manufacturing and aftermarket.

    Vendors

    As of 2018, there are 405 vendors in the country capable of supplying to OEMs. This is significantly more than in 2014, where only 277 vendors existed. These 405 vendors all meet the Level 3 status of being able to supply parts with quality levels of 96.7% or higher.

    However, out of the total sum, 130 companies are Level 4 vendors with tooling development capabilities, while 55 companies are Level 5 vendors with R&D capabilities. While impressive, they are a far cry from what the NAP 2014 targeted, which was to have 430 Level 3, 330 Level 4 and 180 Level 5 vendors.

    EEV penetration and local content

    EEV penetration has seen a continuous year-on-year increase from 2014 to 2018, with the latter being earmarked at 62% of TIV, or 339,978 units. By comparison, the first year of the NAP 2014 saw just 14% of TIV, or 93,975 units. On a related note, during the same period, RM58.7 billion worth of local content has been used in vehicle assembly.

    Investments

    From 2014 to 2018, with the NAP 2014 in effect, RM10.05 billion worth of investments have been made, with RM3.64 billion being FDIs, while the remaining RM6.41 billion is from DDIs.

    Technology development

    In the NAP 2014 list of targets, one of the goals set was to establish two automotive specialised design and engineering centres as well as a full-fledged Vehicle Type Approval (VTA) testing centre.

    The latter is still listed as a target for the latest NAP 2020, and can be considered as being unmet. On the other hand, there are now three specialized design and engineering centres. These include the Malaysia Technology Centre, which serves as one-stop centre for IR4.0 human capital development in automotive and connected mobility ecosystems.

    There’s also the Automotive Design Centre that caters to the automotive industry specifically in the areas of design engineering, simulation and prototyping, with any OEM and vendor from various tiers can leverage on the hardware and software available.

    Lastly, the National Emission Test Centre is an independent entity and recognised as a national laboratory owned by the Malaysia Automotive Robotics and IoT Institute (MARii), an agency under MITI. It features testing facilities dedicated to measuring vehicle emission pollutants and fuel consumption, and is the most advanced emissions testing facility in the ASEAN region, with the ability to measure up to the Euro 6d emission standard – WLTP.

    There you have it, the outgoing NAP 2014 has had some hits and misses while in effect for several years. With the NAP 2020 now implemented, there’s a whole new list of targets, which you can check out in our separate post. Do you think these goals are feasible?

     
     
  • NAP 2020 – MyEVOC welcomes the progression towards Next Generation Vehicles (NxGVs) in policy

    The government’s plan to focus on the development of Next Generation Vehicles (NxGVs) in the just announced National Automotive Policy 2020 (NAP 2020) has been welcomed by the Malaysian Electric Vehicles Owners Club (MyEVOC).

    “We welcome the continued push towards energy-efficient vehicles (EEV) and their evolution towards always-connected, information-rich personal transport vehicles, which has shown great promise in other markets,” MyEVOC president Datuk Shahrol Halmi said in a press statement.

    The proposed standards to be developed for NxGV will include the establishment of an Electric Vehicle Interoperability Centre (EVIC), which will develop an EV charging protocol as well as energy management for the EV ecosystem.

    This, MyEVOC said, will be especially useful for EV charging equipment manufacturers to ensure that their devices are fully compatible with all new EV models as they are made available in Malaysia. It added that EVIC will also help to highlight the positive impact of having EVs as energy storage devices that can deliver energy back into the grid when needed, therefore reducing the overall cost of electricity for all consumers.

    “With the NAP formalised, we hope to see even greater coordination and integration between government agencies, especially in moving towards lowering carbon emissions from the transportation sector, which will need to involve decision-makers from the ministry of transport, ministry of energy, technology, environment and climate change (MESTECC) and , the ministry of international trade and industry (MITI), among others,” Shahrol added.

    “We are grateful to be able to engage with Malaysia Automotive, Robotics and IoT Institute (MARii) since we were formed last year and MyEVOC is looking forward to contribute more of our members’ real-life user experiences to other agencies,” said MyEVOC deputy sec-gen Zuhril Azhar.

     
     
  • Proton lauds NAP 2020’s vision for next-gen vehicles

    The National Automotive Policy 2020 (NAP 2020) was officially launched in KL this morning by prime minister Tun Dr Mahathir Mohamad. It aims to push the country towards becoming a regional leader in automotive manufacturing, engineering and technology, and is very much an enhancement of NAP 2014, expanding on the outlines seen previously.

    In a nutshell, NAP 2020 consists of three directional thrusts and three strategies as well as seven roadmaps/blueprints to be implemented to the year 2030. The directions include a focus on Next Generation Vehicles (NxGVs), Mobility as a Service (MaaS) and Industry 4.0, and the plan will incorporate the development of Automated, Autonomous, Connected Vehicles (AACV), light weight material tech as well as hybrid, electric and fuel cell vehicles.

    Local carmaker Proton is lauding the government’s push in transforming Malaysia to a hub for the development and production of NxGVs and critical components. In a statement, the carmaker says that the new strategy presents opportunities to automotive industry stakeholders to introduce new technologies, while also elevating the skills and capabilities of local vendors.

    Proton says that with its ownership structure (50.1% DRB-Hicom, 49.9% Geely), the company is able to leverage on its shareholder strengths – local ecosystem access via DRB-Hicom and access to new tech via Geely – to seize opportunities presented by NAP 2020.

    “At this early stage however, Proton will continue with its schedule of investing in new products and technologies as well as plant and manufacturing facilities. The company will also continue to work with local vendors and promote investments in new technologies, especially through strategic collaborations to infuse technical capabilities and expand commercial viability,” the statement added.

    “The unveiling of NAP 2020 shows Malaysia is moving towards the adoption of new technology vehicles featuring electric and hybrid powertrains as well as autonomous and connectivity technologies. Proton’s two shareholders grant us access to Malaysia’s automotive industry ecosystem as well as the technologies needed for NxGV models, one of the main thrusts of the policy,” said Proton CEO Li Chunrong.

    “There are still many steps to take and Proton is confident with the correct policies in place, we will be able to contribute towards Malaysia achieving the goals set out in NAP 2020,” he added. More on the NAP 2020 here.

     
     
  • QUICK LOOK: DreamEdge New National Car prototype

    Full Malaysian effort, fun to drive, family friendly, highly fuel efficient, and value for money. Those were some of the terms used to describe DreamEdge’s new national car, which the company claims to be a plus-sized B-segment sedan.

    We managed to catch a glimpse of the prototype today, or at least a portion of its front and rump. According to DreamEdge, the car will get a “modern and futuristic” styling, and all design concept and development will be led by the Cyberjaya-based digital engineering services and consultancy company.

    In terms of powertrain, the car will likely get either a regular internal combustion petrol engine or a hybrid powertrain, but this will be led by technology partner Daihatsu, which confirmed its involvement in the project last October. Daihatsu has no equity involvement, but will merely head powertrain and platform development. It won’t be another Daihatsu rebadge, we were told.

    For timeline, there will be some form of unveiling next month, plus a working prototype is due by mid this year. A market debut is expected in March 2021, with production (contracted) set to take place in the first half of 2022. DreamEdge plans to sell at least 3,000 units of the sedan monthly, or a minimum of 36,000 units over the course of 12 months. Other features include modern in-car connectivity functions, and Advanced Driver Assistance Systems.

     
     
  • UMW Toyota welcomes NAP 2020, to CKD hybrid cars

    Following the launch of the 2020 National Automotive Policy, several car brands have released official statements, with UMW Toyota Motor being the latest. Company president Ravindran K said he is pleased that the government has provided an ‘updated roadmap’, one which provides “great value” to its future plans.

    One of the key focuses of the new NAP is on Next Generation Vehicles (NxGV), which UMWT will support when specifications and expectations are clear. The company also hopes that the government will continue giving incentives for a sufficient length of time, so as to justify investment and provide reasonable returns on investment.


    The Corolla Hybrid was spotted in Iskandar Puteri, Johor, last October

    “We believe that our Bukit Raja Plant is equipped with automation, skilled manpower and the capacity to move align with the government’s vision of developing our industry into Industry Revolution 4.0 (IR 4.0),” Ravindran said, adding that UMWT is planning to introduce more CKD hybrid cars in the future. “We urge the government to support in increasing the incentives provided to spur the hybrid market in Malaysia,” the statement added.

    UMWT deputy chairman Akio Takeyama said: “We are always grateful to the ministries and agencies for their guidance, support and cooperation and give assurance that we will do our part to help develop not just the Malaysian automotive industry but also strive to contribute back to society. As we welcome this new era, we hope to work together with the government for Malaysian society to have a better life.”

     
     
  • Perodua hails the NAP 2020 as consistent govt policy

    The National Automotive Policy 2020 (NAP 2020) was officially launched in KL this morning by prime minister Tun Dr Mahathir Mohamad. It aims to push the country towards becoming a regional leader in automotive manufacturing, engineering and technology, and is very much an enhancement of NAP 2014, expanding on the outlines seen previously.

    In a nutshell, NAP 2020 consists of three directional thrusts and three strategies as well as seven roadmaps/blueprints to be implemented to the year 2030. The directions include a focus on Next Generation Vehicles (NxGVs), Mobility as a Service (MaaS) and Industry 4.0, and the plan will incorporate the development of Automated, Autonomous, Connected Vehicles (AACV), light weight material tech as well as hybrid, electric and fuel cell vehicles.

    Market leader Perodua has hailed the NAP 2020 as consistent government policy. “NAP 2020 sees consistency in the government’s policies to advance the Malaysian automotive eco-system to the next level. This is apparent in the continued support for component localisation, which is the backbone of the country’s automotive industry,” said Datuk Zainal Abidin Ahmad, president and CEO of Perodua.

    He points out that over the past decade, Perodua has purchased a total of RM43.5 billion worth of components from local suppliers, including RM5.4 billion in last year alone. This year, P2 expects to spend nearly RM6 billion on locally-sourced components. “This volume sustains and fortifies the Malaysian automotive eco-system, contributing to the economy, jobs and nation-building,” Zainal Abidin said.

    The P2 chief also said that the government’s commitment to further the Energy-Efficient Vehicle (EEV) programme, in which many players have invested in, is consistent. He pointed out that Perodua is Malaysia’s first and largest EEV manufacturer with over 800,000 EEVs sold to date.

    “On autonomous technology, Perodua, guided by our technical and technology partner Daihatsu Motor Company of Japan, has laid the foundation with its Advanced Safety Assist (ASA) suite of driver assistance systems and crucially, we have made it accessible to the masses. This technology will be further improved in line with our aim to provide Malaysians with mobility that offers even greater safety and value,” Zainal Abidin added. More on the NAP 2020 here.

     
     
  • NAP 2020 targets 1.22 million TIV, RM12.3 billion in exports by 2030 – 323,000 new jobs to be created

    As part of the launch of the new National Automotive Policy (NAP) today, the Ministry of International Trade and Industry (MITI) has released its targets over the next 10 years.

    Among other things, the ministry hopes to grow the total industry volume to 1.22 million units and the total production volume to 1.47 million units by 2030. These numbers should include passenger and commercial vehicles as well as motorcycles, if the previous NAP’s targets were anything to go by.

    This represents a mild increase over the 2014 projections of one million units and 1.35 million units respectively. Last year, the automotive industry sold 604,297 vehicles and produced 571,632, although these figures do not include motorcycles.

    The ministry is banking on an increase in exports of completely built up (CBU) vehicles, which are expected to bring in RM12.3 billion in ten years. All in all, MITI targets a contribution of RM104.2 billion from the automotive industry to Malaysia’s gross domestic product (GDP) by 2030.

    Exports of locally-made components are also expected to rake in RM28.3 billion fo new automotive parts and RM10 billion for remanufactured parts. In terms of employment, MITI says the NAP 2020 should create 323,000 new jobs, including 128,000 in manufacturing, 46,000 in the aftermarket, 30,000 in the robotics sector, 44,000 in the Internet of things (IoT) sector and 75,000 in the mobility-as-a-service (MaaS) sector.

    Also listed are the creation of new research and development facilities, including a full-fledged Vehicle Type Approval (VTA) testing centre, an Electric Vehicle Interoperability Centre (EVIC), an autonomous/automatic vehicle test bed, a virtual design centre, an additive manufacturing (i.e. 3D printing) design centre, a robotics and artificial intelligence centre, a big data analytics (BDA) centre, a digital twin centre and a technology academy in the field of automobiles and overall mobility.

    The broader strokes of NAP 2020 were revealed today, with seven roadmaps having been detailed in the field of Next Generation Vehicles (NxGVs), Mobility as a Service (MaaS) and Industry 4.0. The plan will also incorporate the development of Automated, Autonomous, Connected Vehicles (AACV), lightweight material technology as well as hybrid, electric and fuel cell vehicles. Read more here.

     
     
 

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Last Updated 23 May 2020