Delayed vehicle pricing approval still an ongoing issue, says MAA – could take four months or longer

One of the issues that has been affecting car companies in Malaysia for the past few months is the delayed approval of vehicle pricing, particularly for CKD locally-assembled cars, which has led to certain launches being delayed or estimated pricing being issued in the meantime.

As an example, the Honda HR-V facelift was first previewed in July 2018, but was only officially launched in January 2019. Other models such as the Toyota Rush and Vios, along with the Mazda CX-5 were also introduced with estimated pricing initially.

A more recent case is the Honda Civic facelift, with Honda Malaysia announcing the start of order taking in September 2019, but has yet to officially launch the model. Even new brands appear to be affected by it, such as Borgward, as there is till no official update when it will start its CKD operations.

During a Q&A session held after Malaysian Automotive Association’s (MAA) 2019 full-year review, the association was asked on the current status of the matter. In response, MAA president Datuk Aishah Ahmad said, “I think you are talking about the Industrial Adjustment Fund (IAF), the incentives that we apply for CKD locally assembled vehicles.”

“The process is we have to send [an application] to the ABDC (Automotive Business Development Committee), which consists of its chairman, MITI (ministry of international trade and industry), MIDA (Malaysian Investment Development Authority), MARii (Malaysia Automotive, Robotics and IoT Institute), Customs and the MoF (ministry of finance).”

“They have said that this will take three months before they can process whatever application we send in, but the issue is not the ABDC. After that, when it goes to the MoF, you do not know how long it will take before we get the approval letter. It could be four months; it could be more than that,” she explained.

Aishah continued, “that has not changed, but what they have told us is they are reviewing the process and they’re trying to shorten it, which they will announce to the industry. They are now reviewing it.”

In January last year, MITI said it would be taking steps to address the issue of delayed vehicle price approvals, with several measures planned. Among them include increasing the frequency of the monthly meetings held by the ABDC, as well coming up with an enhanced process flow and client charter of ABDC to ensure that there is greater clarity in the process of evaluating incentive applications.

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