KUALA LUMPUR: Local car manufacturers have been urged to invest in new technologies to boost green vehicles production in Malaysia, via partnerships with international automakers.

International Trade and Industry Ministry (MITI) secretary-general Datuk Dr Rebecca Fatima Sta Maria said local car manufacturers had to perform with a bang in this green vehicle area, otherwise they would be left out in the current trend towards energy-saving vehicles.

"Even now there is demand for green vehicles with the rising cost of fuel. It makes sense as Malaysians now want more fuel efficient, cost-saving and environmental- friendly cars," she told The Malaysian Reserve in a recent interview.

Malaysia's national carmakers, Proton Holdings Bhd and Perusahaan Otomobil Kedua Sdn Bhd (Perodua), had transformed Malaysia from a mere motorcar assembler, into a global car manufacturer with export business.

However, to further enhance their sustainability, Dr Sta Maria said both Proton and Perodua should engage actively in commercialising energy-efficient vehicles in line with the rising car ownership rate in Malaysia.

In fact, foreign automakers such as Honda, Toyota and Lexus are very much on track in producing energy- efficient vehicles, to meet the increasing demand for such cars in Malaysia.

Hence, she said investing in the development of hybrid and electric vehicles bears the benefits of acquisition of new and high-end technology, as well as promotion of a more sustainable energy policy.

Taking that into consideration, a comprehensive mix of fiscal incentives, duty exemptions and customised training and research and development grants was included in the National Automotive Policy (NAP) review to maximise returns on investment.

Under the new measures in the NAP review (effective from Jan 1, 2010) there is a segment to promote hybrid and electric vehicles and the development of related infrastructure to encourage local automakers to explore into advanced technology area.

NAP revised auto policy is all about reducing the carbon footprint by 40% and increase the number of hybrid and electric cars on the roads by 10% by 2020.

"So everything that we do is to be in sync with the policy that we have announced," she said, adding that it is timely for domestic auto manufacturers to focus on energy efficiency by using new technology.

She also said the Energy, Green Technology and Water Ministry would draw up a roadmap to develop the infrastructure for electric vehicles.

"For electric vehicles we do not have proper infrastructure. That's the challenge, if you ask me. You can't have an electric vehicle without a proper infrastructure and that's why our local manufacturers must keep up with the technologies through collaboration to reduce their costs. Invest in new technologies," she said.

Dr Sta Maria said the ministry was looking into other incentives, including income tax exemption, however, it was up to the industry players to educate the policymaker on where it could contribute to the process and what would it take for them to do more in the energy-efficient vehicles area.

At present under the NAP, the government is providing exciting incentives to green carmakers.

Incentives for hybrids cars, which were announced in the 2011 budget, were extended till Dec 31, 2013, whereby the deal for hybrid cars with 2.0l engines and below was supposed to expire on Dec 31, 2011.

Previously, it was 100% import duty exemption and 50% excise duty exemption; Budget 2011 made it 100% exemption for both import duty and excise duty.

NAP was introduced on March 22, 2006, to facilitate the required transformation and optimal integration of the local automotive industry into regional and global industry networks within the increasingly liberalised and competitive global environment.

NAP is the main thrust for the formulation of the strategic directions of the industry under the Third Industrial Master Plan, 2006-2020.

Three and a half years after its introduction, NAP has been reviewed, resulting in new policies that will foster a more competitive market for local and international companies.

By Kamalavacini Ramanathan

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