National car status for Proton only?

A proposal is being floated that only Proton Holdings Bhd (5304) will hold the national car company status, industry sources say.

The proposal the automotive market is talking about now is being made for the refined National Automotive Policy (NAP) that should be finalised late this month.

If the proposal goes through, it means Perodua, the Naza group and Sime Darby Bhd's Inokom Corp Sdn Bhd could lose their national car status.

The ramification from such a plan could result in consumers possibly paying more to buy Malaysian-made vehicles from Naza, Inokom and Perodua, the country's largest car company by sales.

The heftier price could come in play, as the companies will have to pay similar engine capacity-related excise tax rate of 65-75 per cent as the likes of non-national car distributors UMW Toyota Motor, Edaran Tan Chong Motor and Honda Malaysia on packages of parts for assembly into complete passenger vehicles here.
If the proposal goes through, only Malaysia's first national carmaker, Proton Holdings Bhd will be spared, as the redefined policy favours companies such as Proton which has full-time research and development activities.

Currently, the national car status allows the holder to enjoy a 50 per cent discount of local excise tax, which is a central levy on manufactured products and in this case, locally produced passenger cars including multi-purpose vehicles, sports utility vehicles and window vans.

"The potential move is to push car companies to be more serious and heavily involved in making or producing cars locally, and not depend too much on imported parts," said an industry source.

"It will also reflect that only full-fledged local car manufacturers with full-time research and development activities like Proton will continue to enjoy the tax incentive," he added.

People close to Perodua, however, stressed that the company's national status will remain intact because of the "Japanese sentiment".

"Any move (by the government) to strip the status will not go down well with Perodua's Japanese shareholders. The Japanese Embassy here regards Perodua as one of the best joint ventures Japan has with Malaysia," one of them said.

Two Japanese firms, Daihatsu Motor Co Ltd and Mitsui & Co Ltd, collectively hold 27 per cent of Perodua. They control the manufacturing operations at Perodua's plant in Sungai Choh in Rawang through Perodua Auto Corp Sdn Bhd.

Other shareholders of Perodua are UMW Corp Sdn Bhd with a 38 per cent stake, MBM Resources Bhd (20 per cent), PNB Equity Resources Corp Sdn Bhd (10 per cent) and Daihatsu (Malaysia) Sdn Bhd (5 per cent). - btimes.com.my