Rev up the new, out with the old

TheStar Online (November 2, 2009)

The revised National Automotive Policy announced by the Government has brought some good news to the industry, but there are reservations, particularly by owners of older cars.

THERE’S much for the industry to decipher from the latest round of changes announced by the Government on the National Automotive Policy.

A few of the measures may be of interest to the man in the street.

One of them is the VEL or Vehicle End of Life policy. It is a norm in advanced countries to adopt such a policy.

Singapore has one for some time where older cars are sent for annual inspections to ensure they are roadworthy and do not pose a danger to other road users.

The idea has been mooted many times in Malaysia over the years but it never gained prominence until now – the argument being that there are 2.7 million vehicles which are 10 years or older on the road. Compared with other countries, Malaysia has a high average vehicle age and low scrap rate.

Vehicles which are 15 years old will most likely be subjected to an annual inspection although no implementation date has been announced.

If implemented it might not become popular as some people in a Felda plantation for example might no longer be able drive their 20-year-old boneshakers anymore unless they fork out the money for repairs.

Let’s hope Puspakom – or whichever agency responsible for vehicle inspections – has the capacity to deal with the sheer number of vehicles that are due for inspections. There should not be too much of a hassle to go through the process.

The introduction of the cleaner Euro 4M standard for petrol and diesel by 2011 should be some cause for cheer as Malaysia has been lagging behind in fuel standards.

Malaysia only moved from Euro 1 to Euro 2M in September this year and the sulphur content of diesel has been reduced from 5,000 parts per million (PPM) to 500ppm.

Euro 4M has not more than 50ppm of sulphur. Sulphur in a diesel engine produces sulphur oxides and particulates – both of which have been linked to health problems.

But every step up the cleaner fuel ladder brings with it additional refining processes and questions persist over how much more the new fuel will cost.

The good news is that Euro 4M will allow many of the new generation diesel cars, which have a low carbon footprint, to be sold in the country. More of these would augur well for the consumer as well as for the environment.

“Many European franchise holders were keen to import diesel cars that were able to run on Euro 4 standard a few years ago but held back because the Malaysian fuel quality was still at Euro 1,” a spokesman for a local car franchise said.

In Europe, where 50% of the passenger cars are diesel powered, almost every car maker including Mercedes-Benz, BMW, Volkswagen, Peugeot, Renault, Citroen and Fiat, have the new generation diesel engine options in their line up.

Consumers can expect fuel bills to go down with these diesel engines, which provide more power, torque and higher fuel economy compared with a similarly petrol engine.

Every budget brings the hope of cheaper cars but that is an unlikely scenario in the latest round as the tax structure for cars is largely intact.

In fact, those planning to buy a hybrid car might also want to do so before the end of next year.

That is when the exemption on import duty and 50% excise duty exemption for imported hybrid vehicles given in 2008 ends.

There is no mention of that date being extended under the revised NAP and the Government is offering a slew of incentives and exemptions to manufacturers to establish hybrid car and electric car assembly.

If and when there are takers, it’s going to take some time before you can dream of cheap hybrids.