Advantage Honda

Sales of hybrid cars, which had just started to take off in Malaysia, may stall in the very near future if the Malaysian government fail to renew the exemption for Complete Built Up (CBU) hybrid vehicles that expires at the end of the year. Without the exemption, prices for CBU hybrids will soar and it is feared that this will price the vehicle out of the market. It is thought, though, that the tax exemption for ‘complete knock down’ vehicles (CKD kit cars) will remain in place.

An unnamed source said that the move would be fairly in line with the Malaysian government’s desire to make Malaysia a manufacturing centre of energy efficient vehicles (EEVs) and is very much in line with an earlier announcement made by GWM, who have entered into a joint venture to produce EEVs for the ASEAN market from a new facility in Gurun, North Malaysia.

Honda stand to win the hybrid race in Malaysia
if CKD tax exemption not renewed
image: Honda Malaysia

If the tax exemption for CKD vehicles is not renewed, it will leave Honda Malaysia in a great position as they are currently the only manufacturer with hybrid capacity in Malaysia, where they assemble the popular Jazz hybrid near Malacca. Honda Malaysia’s CEO, Yoichiro Ueno, is known to have urged the government to extend the incentives to CKD vehicles.

The President of UMW Toyota, Datuk Ismet Suki, said, “Without tax incentives, hybrid cars would not be as attractively priced. More time is needed to educate the public and improve awareness of these eco-friendly cars. We are seriously looking at introducing new Toyota hybrids into the Malaysian market and and want to consider local assembly.”

In 2010, just 322 units of hybrids were sold in Malaysia; once the tax exemption came into effect, this number shot up to 8403 units in 2011 and 15 355 units last year. Honda had the most sales with 8712 units, followed by Toyota with 5653 units, Lexus with 979 units and Porsche chasing the tail on a mere 11 units.

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