Lack of focus on future technology caused by lack of energy roadmap and visionary automotive policy
The 2011 Budget came with a lot of goodies for Malaysians, from wage increase to civil servants to various financial assistance and stimulus packages to keep the economy humming along.
The Automotive industry received a targeted tax break focused on hybrid vehicles below 2,000cc which will run for two years until December 21 2013.
This is good news for companies such as Honda and Toyota that already have hybrid vehicles in their local line-up and will likely encourage other carmakers to begin importing similar vehicles into Malaysia.
Encik Ismet Suki, President of UMW Toyota Motor commented, “We are delighted with the announcement by the Prime Minister. This shows that the government is committed to make Hybrid vehicles affordable for more Malaysians.
"It would be exciting to see more Hybrid vehicles on our roads and more people would be aware about the effectiveness of Hybrid technology as a proven alternative to lowering fuel consumption and environment friendly.”
While it may or may not be exciting to see more hybrid vehicles on Malaysian roads, the question is; How does this benefit Malaysians and the Malaysian automotive industry.
Clean Diesel and Pure Electric cars are better bets
If the Government is hoping that it would reduce national oil consumption, then they would be better off spending money setting up the infrastructure for clean diesel.
After all, it is accepted that diesel cars use as little as 30 per cent less fuel compared to their petrol cousins and if 50 per cent of all new cars sold are diesel, the country will see a massive dip in total national oil consumption.
In Europe 50 per cent of all new cars sold are diesel powered and this happened because diesel really does help motorists save money and the environment.
In my opinion, the hybrid tax break benefits Malaysians who want to own hybrid vehicles more than it benefits the industry as a whole as we do not have any indigenous hybrid powerplant technology.
Proton's involvement in the electric vehicles and hybrid technology are all bought in from Europe or the Far East and therefore not likely to be boosted by the tax break.
The tax break will also skew the national demand for cars towards hybrid vehicles as Malaysians flock towards them for the simple fact that they are priced lower than anything else and allows Malaysians to enjoy prices that are not distorted by taxation.
This happened in the early days of duty-free twin-cab pick-up trucks but, as with everything else, demand will find its natural level and stay there but in the final analysis we see a situation where twin-cab pick-ups are a lot more popular than they would otherwise be without the tax break.
Personally I see do not see how encouraging massive influx of hybrid cars will help the local auto industry as it is a stopgap technology that will eventually be replaced by electric cars.
We would do much better to give these tax breaks to pure electric cars such as Tesla,Fisker, Chevrolet Volt and Nissan Leaf and give companies incentives to start mass roll-out of electric vehicles and charging stations in Malaysia.
This would put Proton under pressure to speed up their own electric car programme and it would attract high-end battery research outfits to come to Malaysia. This would make us a centre for large-scale trial and rollout of electric car technology.
This would not just benefit Malaysians but also the Malaysian automotive industry
I believe tax incentives should have a medium to long term goal rather than be used to satisfy short term demands and Hybrid is definitely a short term stopgap technology because we already see companies rolling out pure electric cars.
Tesla, for example has recently purchased a large auto manufacturing facility to produce the Model S, while the Chevrolet Volt and Nissan Leaf are genuine electric cars from mass-market manufacturers.
This is the level of confidence that the industry has of electric car technology. We should ride this new wave rather than the weakening wave of Hybrid
We have set our focus too near in the future when tax breaks should really be targeted at technologies that would pull us ahead of the regional competition.
While I will not fault the Government for dishing out this tax break for hybrid vehicles, I do want to see them setting their sights on attracting battery technology companies and pure electric propulsion in the next budget.
But before that, can we please have a National Automotive Policy that is coherent and also incorporates an energy usage road-map for the next 30 to 50 years so that the whole economy can start planning for a more efficient and profitable future.
Below is the full statement by UMW Toyota, which is, of course, delighted that the Government is giving them two more years of hybrid tax breaks as they have two models that fall under the category that qualifies for a duty-free status.
En. Ismet Suki, President of UMW Toyota Motor Comments on 2012 Budget Announcement
Shah Alam - UMW Toyota Motor welcomes the announcement by the Prime Minister Datuk Seri Najib Tun Abdul Razak to extend the exemption of the Import Duty and Excise Duty for Hybrid Vehicles below 2000cc until 31st December 2013.
Encik Ismet Suki, President of UMW Toyota Motor commented, “We are delighted with the announcement by the Prime Minister. This shows that the government is committed to make Hybrid vehicles affordable for more Malaysians. It would be exciting to see more Hybrid vehicles on our roads and more people would be aware about the effectiveness of Hybrid technology as a proven alternative to lowering fuel consumption and environment friendly.”
He also said, “The government is moving towards the right direction in promoting a “greener living” by reducing the CO2 emission with more hybrid vehicles on our roads. UMW Toyota Motor strongly supports this government initiative and will continue to promote hybrid vehicles.”
“We at UMW Toyota Motor would like to congratulate the Prime Minister on the successful budget announcement that is favorable to private companies and will definitely ease the burden of more Malaysians.”
Currently the company offers two Hybrid vehicles below 2000cc which are the Toyota Prius priced at RM136,000 and Lexus CT200h priced at RM 168,000 and RM196,000 for the Luxury variant (on-the-road price, without insurance) in Peninsular Malaysia.
The Automotive industry received a targeted tax break focused on hybrid vehicles below 2,000cc which will run for two years until December 21 2013.
This is good news for companies such as Honda and Toyota that already have hybrid vehicles in their local line-up and will likely encourage other carmakers to begin importing similar vehicles into Malaysia.
Encik Ismet Suki, President of UMW Toyota Motor commented, “We are delighted with the announcement by the Prime Minister. This shows that the government is committed to make Hybrid vehicles affordable for more Malaysians.
While it may or may not be exciting to see more hybrid vehicles on Malaysian roads, the question is; How does this benefit Malaysians and the Malaysian automotive industry.
Clean Diesel and Pure Electric cars are better bets
After all, it is accepted that diesel cars use as little as 30 per cent less fuel compared to their petrol cousins and if 50 per cent of all new cars sold are diesel, the country will see a massive dip in total national oil consumption.
In Europe 50 per cent of all new cars sold are diesel powered and this happened because diesel really does help motorists save money and the environment.
In my opinion, the hybrid tax break benefits Malaysians who want to own hybrid vehicles more than it benefits the industry as a whole as we do not have any indigenous hybrid powerplant technology.
Proton's involvement in the electric vehicles and hybrid technology are all bought in from Europe or the Far East and therefore not likely to be boosted by the tax break.
The tax break will also skew the national demand for cars towards hybrid vehicles as Malaysians flock towards them for the simple fact that they are priced lower than anything else and allows Malaysians to enjoy prices that are not distorted by taxation.
This happened in the early days of duty-free twin-cab pick-up trucks but, as with everything else, demand will find its natural level and stay there but in the final analysis we see a situation where twin-cab pick-ups are a lot more popular than they would otherwise be without the tax break.
We would do much better to give these tax breaks to pure electric cars such as Tesla,Fisker, Chevrolet Volt and Nissan Leaf and give companies incentives to start mass roll-out of electric vehicles and charging stations in Malaysia.
This would not just benefit Malaysians but also the Malaysian automotive industry
Tesla, for example has recently purchased a large auto manufacturing facility to produce the Model S, while the Chevrolet Volt and Nissan Leaf are genuine electric cars from mass-market manufacturers.
This is the level of confidence that the industry has of electric car technology. We should ride this new wave rather than the weakening wave of Hybrid
While I will not fault the Government for dishing out this tax break for hybrid vehicles, I do want to see them setting their sights on attracting battery technology companies and pure electric propulsion in the next budget.
But before that, can we please have a National Automotive Policy that is coherent and also incorporates an energy usage road-map for the next 30 to 50 years so that the whole economy can start planning for a more efficient and profitable future.
Below is the full statement by UMW Toyota, which is, of course, delighted that the Government is giving them two more years of hybrid tax breaks as they have two models that fall under the category that qualifies for a duty-free status.
En. Ismet Suki, President of UMW Toyota Motor Comments on 2012 Budget Announcement
Shah Alam - UMW Toyota Motor welcomes the announcement by the Prime Minister Datuk Seri Najib Tun Abdul Razak to extend the exemption of the Import Duty and Excise Duty for Hybrid Vehicles below 2000cc until 31st December 2013.
Encik Ismet Suki, President of UMW Toyota Motor commented, “We are delighted with the announcement by the Prime Minister. This shows that the government is committed to make Hybrid vehicles affordable for more Malaysians. It would be exciting to see more Hybrid vehicles on our roads and more people would be aware about the effectiveness of Hybrid technology as a proven alternative to lowering fuel consumption and environment friendly.”
He also said, “The government is moving towards the right direction in promoting a “greener living” by reducing the CO2 emission with more hybrid vehicles on our roads. UMW Toyota Motor strongly supports this government initiative and will continue to promote hybrid vehicles.”
“We at UMW Toyota Motor would like to congratulate the Prime Minister on the successful budget announcement that is favorable to private companies and will definitely ease the burden of more Malaysians.”
Currently the company offers two Hybrid vehicles below 2000cc which are the Toyota Prius priced at RM136,000 and Lexus CT200h priced at RM 168,000 and RM196,000 for the Luxury variant (on-the-road price, without insurance) in Peninsular Malaysia.
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