theSun | THURSDAY OCTOBER 29 2009
business
AP to be scrapped by 2015
FOREIGN FIRMS CAN MAKE LUXURY CARS IN M’SIA
KUALA LUMPUR: Foreign firms will be given
manufacturing licences to hold 100% equity in
firms which produce luxury vehicles with an en-
gine capacity of more than 1,800cc and costing
more than RM150,000 while the controversial
Approved Permits (AP) system will be scrapped
in 2015.
These are two of the 18 new policies and
measures covering licensing, duties, incentives,
technology and environment, safety and stand-
ards and approved permits (AP) introduced under
the National Automotive Policy (NAP) Review
announced by International Trade and Industry
Minister Datuk Mustapa Mohamed yesterday.
Under the review, the import duties of all com-
pletely-built-up (CBU) and completely-knocked-
down (CKD) cars will be maintained.
Incentives and exemptions will be increased
to develop local auto parts so that there would
no longer be parts imports in 18 months, a move
which help do away with imported and used
spare parts outfits.
Vehicles which are 15 years and above would
also have to go through mandatory testing to
ensure their roadworthiness but provisions
would be made for vintage cars, he told a media
conference to announce the long-awaited review
of the NAP.
He said the review was undertaken after
extensive discussions with industry players
including manufacturers, assemblers, auto parts
makers, non-governmental organisations as well
as car associations.
Below are the new policies and measures:
1. Manufacturing licence (ML)
» The freeze on issuance of new MLs will be
lifted for selected segments like luxury pas-
senger vehicles with engine capacity of 1,800cc
and above, and on the road price of not less than
RM150,000; hybrid and electric vehicles; pick-up
trucks; commercial vehicles; and motorcycles
with engine capacity of 200cc and above.
» No equity condition imposed in new ML.
» Maintain current policy on contract assembly
to utilise existing excess capacity.
2. Maintain freeze on ML for recon-
ditioning and reassembling (rebuilt)
activities
» The freeze on ML for rebuilt activities is main-
tained.
3 Duty/tax
» The current rates of import duty and excise
duty are maintained.
The current import duty for completely-built-
up (CBU) and completely-knocked-down (CKD)
vehicles are:
Most favoured nation (MFN)
CBU: 30% (motor vehicles);
CKD: 10% (motor vehicles);
CBU: 30% (motorcycles); and,
CKD: 0-10% (motorcycles).
Asean Free Trade Area (Afta)
CBU: 5% (both motor vehicles and motorcycle)
(effective 1.1.2010 - 0% for CBU)
CKD: Nil
The current excise duty for CBU and CKD vehicles
based on engine capacity are:
Passenger cars: 75-105%;
MPV/van: 60-105%;
4WD: 65-105%; and,
Motorcycles: 20-30%.
4. Gradual removal/reduction of
import duty to meet Afta/FTA com-
mitments
» Malaysia will continue to implement its
MAA expects car prices to be maintained
KUALA LUMPUR: Malaysian Automotive
Association (MAA) president Datuk Aishah Ahmad
expects car prices to be maintained following the
review of the National Automotive Policy (NAP)
where import duties were left unchanged.
“If the car companies are more efficient, then
perhaps they can look at reducing prices but this
is unlikely.
“At the end of the day, they will be able to give
customers cars with better features.
“Although you pay slightly more, you will get
value for money,” she told reporters after the
announcement of NAP review by Minister of
International Trade and Industry Datuk Mustapa
Mohamed yesterday.
Among others, the revision will see for-
commitments under Asean and other existing
and new free trade agreements (FTs).
» Import duty reduction/abolition is implemented
as agreed under respective FTAs.
» Details on duty structure available can be
obtained at Miti website, www.miti.gov.my
Current Status:
Import duty for CBU and CKD vehicles are:
MFN
CBU: 30% (motor vehicles);
CKD: 10% (motor vehicles);
CBU: 30% (motorcycles); and,
CKD: 0-10% (motorcycles).
Afta
CBU: 5% (both motor vehicles and motorcycle)
(Effective 1.1.2010 - 0% for CBU)
CKD: Nil
5. Tax exemption on value of
increased exports of vehicles and
parts/components
» Increase exemption on statutory income:
From 10% to 30% for goods that attain at least
30% value-added.
From 15% to 50% for goods that attain at least
50% value-added.
6. Gazette price of imported used
vehicles to address under declara-
tion
» Establishment of gazetted price for imported
used CBU motor vehicles.
7. Better incentives for critical and
high value-added parts/components
production
» 100% pioneer status (PS) for 10 years; or
» 100% investment tax allowance (ITA) for five
years for the manufacturing of the following
products: transmission system; brake system;
airbag system; and steering system.
8. Promote hybrid/electric vehicles
and development of related infra-
structure
» Incentives to local assemblers/manufacturers
of hybrid/electric vehicles
- 100% ITA or PS for a period of 10 years;
- customised training and R&D grants in addition
to existing grants;
- exemption of 50% on excise duty for locally
assembled/manufactured vehicles or provision
of grant under Industrial Adjustment Fund (IAF);
and,
- 100% PS for 10 years or 100% ITA for five years
for manufacture of selected critical components
supporting hybrid/electric vehicles.
» Additional attractive customised incentives will
be considered based on proposed activities.
» The Ministry of Energy, Green Technology and
Water will draw up roadmap to develop infra-
structure for electric vehicles.
9. Measures to mitigate impact of
market liberalisation
» Automotive Development Fund (ADF) estab-
lished under Ninth Malaysian Plan (9MP) to im-
prove competitiveness of parts and component
manufacturers through soft loans and grants will
be continued.
» Under Industrial Adjustment Fund (IAF), grants
have been made available to companies that
create significant economic contribution also
will be continued.
10. Full implementation of vehicle
type approval (VTA)
» Transport Ministry will accord priority under
10MP to establish VTA standards and testing
facilities.
11. Gradual introduction and en-
eign firms given manufacturing licences to
produce luxury vehicles with engine capacity
of more than 1,800cc and costing more than
RM150,000.
Meanwhile, the AP system would be scrapped
in 2015 while franchise APs would be terminated
by Dec 31, 2020.
The current rates of import duty and excise
duties would be maintained.
The NAP review aims to, among others,
ensure orderly development as well as long-term
competitiveness and capability of the domestic
motor vehicle industry as a result of market
liberalisation.
New policies and measures would be effective
from Jan 1 next year. – Bernama
forcement of mandatory standards
for parts/components
» Science, Technology and Innovation Ministry
will coordinate and immediately formulate road-
map on enforcement of mandatory standards for
automotive products.
12. Gradual phase-out of imported
used parts/components
» Government will introduce a mechanism to
prohibit imports of used parts/components ef-
fective from June 2011.
13. Gradual phase-out of imported
used commercial vehicles
» Imports of used commercial vehicles will
be prohibited effective from Jan 1, 2016 in line
with:
- gradual phase-out of imports of used parts/
components; and,
- termination of AP system for used passenger
vehicles.
14. Clear roadmap on implementa-
tion on fuel standards
» The government will implement EURO 4M
standards by 2011.
» The Natural Resources and Environment Minis-
try will establish clear roadmap for fuel standards
and quality.
15. Gradual introduction of vehicle
end of life policy
» Introduction of mandatory annual compre-
hensive inspection as requirement for road tax
renewal for vehicles aged 15 years or older.
» This is an initial measure towards implementa-
tion of the vehicle end life policy.
» The Transport Ministry will formulate a
roadmap to implement the vehicle end life
policy.
16. Termination of AP system for
imports of CBU vehicles
» Open AP for used vehicles (commercial, pas-
senger and motorcycles) will be terminated by
Dec 31, 2015;
» Importation of used vehicles is not allowed
after 2015;
» No new applications for Open AP will be
considered; and,
» Franchise AP will be terminated by Dec 31,
2020.
17. Establishment of fund for bumi-
putra development
» A charge of RM10,000 for each unit of Open
AP issued will be introduced.
» A fund will be established to assist bumiputra
companies venturing into automotive and other
businesses.
18. Establishment of strategic
partnership for Proton
» New strategic partnership between Proton
and a global established OEM will be established.
– Bernama
13
Maxis to
offer 2.25b
IPO shares
KUALA LUMPUR: Maxis Bhd’s initial
public offering (IPO) will see the sale
of 2.25 billion Maxis shares equiva-
lent to 30% of the company to new
investors with an indicative offer
price of RM5.20 per share.
“This is by far the largest public
offering the country has ever seen,”
said chief executive of CIMB Group,
Datuk Nazir Razak, in a statement
released during Maxis’ prospectus
launch yesterday.
CIMB Investment Bank Bhd, Gold-
man Sachs and Credit Suisse are joint
global coordinators for the IPO.
Based on current timelines, the
pricing for the IPO is expected to
be concluded by Nov 10, 2009 and
Maxis is expected to be listed on the
Main Market of Bursa Securities on
Nov 19.
Upon listing, it is envisaged that
Binariang GSM Sdn Bhd through
Maxis Communications Bhd will
effectively own 70% of Maxis, the
statement added.
At a press conference after the
launch, Nazir said Maxis would likely
get the possible deals in the loan and
bond market to raise RM5 billion of
debt.
“This is the right time for Maxis to
go into the market. This is the com-
pany with incredible track record and
fundamentals,” Nazir said.
Maxis currently enjoys 40% share
of the mobile
A model
phone market.
with a copy
– Bernama
of the Maxis
prospectus
at the launch
yesterday.
SAIFUL HIZAM MANSOR/THESUN