NAP 2014: One size does not fit all E2
In light of the National Automotive Policy 2014 that had just been announced recently, President of FMCCAM, Datuk Tony Khor, finds the need to step forth and give his two cents’ worth of the difficulties faced by the used-car industry.
ews reports have been rife about the revised National Automotive Policy (NAP) 2014 of late, of car prices to be lowered by 20-30% by 2017. International Trade and Industry Minister Datuk Seri Mustapa Mohamed had claimed that the policy will effect positively on the development of the Malaysian automotive industry in its bid to catch up with its regional peers and to become an energy-efficient vehicle (EEV) hub by 2020.
Such is an indication that the government of Malaysia is taking its ambition of achieving the high-income nation status by 2020, very seriously. While the NAP will finally provide car buyers with more competitive prices for certain new car brands this year and eventually boost car sales, things on the other hand, may not seem as rosy for the used-car market. In fact, Malaysia’s automotive industry is regarded to be highly complex, as it is structured with intricacies and complicated policies unavoidably posing confusion not only for outsiders, but also among seasoned industry observers. Therefore, it would be inapt to think that one general policy would be sufficient to cover the entire automotive industry. The reality of this situation today, is far-fetched from the expression ‘one size fits all’. Hearing it from the horse’s mouth
“Since the first NAP was announced in 2006; the second, in 2009; to the present NAP this year, there had hardly been any mention of the used-car industry,” Federation of Motor and Credit Companies Association of Malaysia (FMCCAM) President Datuk Tony Khor said. “The government has been coming up with numerous policies to expand and generate the automotive industry — that is a good thing, but it’s beginning to look like they only place importance in enacting new car policies, when the used-car market should also be regarded in our national policies,” he said. According to Khor, the sales of new cars are highly co-dependent on the ability of used cars to be sold. “If the used cars cannot be cleared out effectively, then new car sales will also be affected,” he said. The automotive sector in the country is one of the biggest contributors to the national economy, with as many as 650,000 new cars being purchased every year and with used cars recording 400,000 sold units, annually. As of today, local banks have recorded a whopping amount of RM148 bil outstanding car loan attributed to car buyers, making it the second largest loan in Malaysia. The car industry is a high income generating industry for the country and must be approached in a comprehensive manner considering all players.