Malaysian car vendors and dealers call for tax incentives

Among Perodua managing director Aminar Rashid Salleh’s recommendations for the upcoming budget were soft loans, grants or tax exemptions for local car vendors to assist them in becoming world-class manufacturers.

“In addition, we hope the government will give incentives to car vendors and dealers for training both domestically and abroad either via joint ventures or partners to up-skill their workers,” he said.

Aminar believed this was needed for the vendors to be globally competitive in terms of productivity, quality, delivery and cost competitiveness to survive full liberalisation of the automotive industry.

To reduce foreign labour employment, he also suggested a special fund allocation or incentives to OEMs for the purpose of training school leavers to help fill the need for semi-skilled labour, especially at the vendor level.

“We [further] implore the government to have certification programmes and quality standards introduced to ensure that the workmen are properly trained and consumers are assured of competent workmanship,” Aminar said of staff at the after-sales service centres and body and paint outlets. He believed that the industry and consumers would benefit from standardised service from independent centres.

On the industry’s effect on the economy, Aminar also recommended that the government “consider giving sales tax exemptions for first-time car buyers of national cars to allow more Malaysians to own a vehicle, as the incentive would help buffer any shortfall in the economy next year due to external factors.

“We also ask the government to initiate an end-of-life policy for ageing vehicles to further enhance road safety while, at the same time, stimulate economic growth,” he said.

Aminar added that the government should ideally engage relevant stakeholders, such as consumer associations, auto manufacturers and finance companies, to ensure that the policy was well balanced.

On corporate tax, a point brought up in other sectors as well, Aminar said: “We also request that the government consider the reduction of corporate tax to offset the increase in cost to all industries, especially with the introduction of minimum wage next year.” 

He said the reduction in corporate tax would go a long way in helping businesses adopt the rising cost of doing business without having to raise its product or service prices.

Malaysian Automotive Association (MAA) president Aishah Ahmad said that since the government had extended the exemption of duties on hybrid cars below 2,000cc to the end of 2013, “We are hoping the 2,000cc and above EEVs could enjoy the same benefits. “It would be good if the government also considers reducing duties on motor vehicles which now range between 65 per cent and 105 per cent,” she said.

Edaran Tan Chong executive director Ang Bon Beng pointed out that as the automotive industry is expected to contribute 6 to 8 per cent of the gross domestic product by 2020, he hoped the government would take on gradual structural changes for the industry.