MITI: Delay in car pricing approvals due to comprehensive evaluation

It says this is to ensure public funds and taxpayers’ money are utilised optimally


The delay in new car pricing approvals is partly due to the Automotive Business Development Committee (ABDC) having a decision-making process that is transparent, fair and comprehensively deliberated.

The Ministry of International Trade and Industry (MITI), in a statement yesterday, noted the current government has strengthened all the due process and governance — with the aim to ensure public funds and taxpayers’ money are utilised optimally for the benefits of the public.

Its statement comes after the Malaysian Automotive Association (MAA) said the government was unable to make decisions on tax incentives for qualified locally-assembled vehicles, which has caused a delay in approving new car prices and launches by its members.

According to MITI, some car-makers used to bypass ABDC and get approvals from the Ministry of Finance (MoF) during the past administration.

It said ABDC is not a newly formed body, but was established in 2006 to deliberate the quantum of incentives that should be extended to vehicle companies — including MAA members.

“Many of the applications (in the previous administration) were approved without comprehensive evaluation in determining the return on investment to the government,” MITI said, in response to the news report of MAA blaming ABDC for the delay in car pricing approvals.

MAA president Datuk Aishah Ahmad said on Wednesday that some carmakers have waited up to seven months for the process — which subsequently will impact sales of new vehicles in 2019.

The ministry said ABDC comprises representatives from MITI, MoF, the Malaysia Investment Development Authority, the Malaysia Automotive, Robotic and IoT Institute, and the Royal Malaysian Customs Department.

ABDC — which holds its meeting monthly, also deliberates on the cost-benefit analysis in the process.

The objectives of ABDC are to evaluate and recommend the Industrial Linkage Programme, Multi-Sourcing Parts Programme and customised incentives for energy-efficient vehicles under the National Automotive Policy 2014.

“The recommendations by ABDC are for MoF to consider in deciding the amount of duty reduction to be extended to the vehicle companies,” MITI said.

It said the approval letter from MoF also explicitly stipulates that the gains from the incentives received by vehicle companies are to be passed down to the people.