anaksarawak
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[h=1]Auto Industry[/h]
As most Malaysians know, our country has a tax exemption for all hybrid vehicles with engine displacements of under two-litres (2,000cc), where the manufacturers of these vehicles aren't required to pay import and excise duties up to December 31 this year.
What many don't realise, however, is that this tax exemption negatively impacts those without hybrid technology, as the hybrid cars are cheaper, so consumers will opt for them instead of the non-hybrid cars that may be just as fuel efficient as their hybrid competitors.
The definition of fuel efficient vehicles in Malaysia at the moment doesn't address fuel efficiency as much as it emphasises on technology.
Any hybrid that is less than two litres is defined as fuel efficient, yet many feel that the taxation structure should be based on fuel efficiency or carbon emissions, not solely on technology used.
Instead of simply looking at the technology involved, carbon emissions and fuel efficiency should also be targeted to reduce the amount of carbon in the atmosphere.
As it is now, this tax exemption for hybrids only benefits the manufacturers that have the technology, and in the luxury car segment this only applies to Audi and Lexus.
Companies like Mercedes-Benz, which manufacture cars that have low carbon emissions and high fuel efficiency, will lose out to companies like Audi, as although their vehicles are environment-friendly, their vehicles don't qualify for the tax exemption because they don't utilise hybrid technology, leading people to choose their competitors who have the technology and are able offer vehicles at a cheaper price.
Vice President of Sales and Marketing, Mercedes-Benz Malaysia Passenger Cars, Kai Schlickum, suggests that Malaysia change the taxation structure, which is currently based on engine capacity and hybrid technology to be based on fuel consumption and carbon emission instead.
“Hybrid is only one way to achieve what targets everybody's setting; fuel efficiency and less pollution.
We have Blue Efficiency in every one of our cars that we offer here, in all our CKD models and CBU as well,” he said.
Most developed and developing countries in the world have a taxation structure based on fuel consumption and carbon emission, with Singapore recently forgoing their hybrid incentives in favour of a carbon emissions-based taxation structure beginning January this year.
“Singapore just got rid of their hybrid incentive; they had a hybrid incentive, and now it's carbon emission based and fuel consumption based, which is the only thing that makes sense.
Once you have that, you have a level playing field again, whereas now, the taxation structure benefits only a few, and exactly those that haven't invested millions into the economy here,” Schlickum said.
When compared with luxury hybrids, Mercedes-Benz models produce just marginally more carbon emissions than the hybrids and are just as fuel efficient, yet cost a lot more because of the hybrid tax exemption.
He also said that even though hybrids have the benefit of power, as the batteries generate instant torque, they aren't that much more fuel efficient as hybrids are weighed down by the batteries that weigh at least 100kg.
Mercedes-Benz has BlueTec diesel hybrid engines, but they can't run on Euro 2 diesel, which is the only type of diesel fuel available in Malaysia, instead they can only use Euro 4, which is why they are unable to bring the engines in for the Malaysian market.
“How can we, with confidence say we are doing our best part in Malaysia to improve the environment with the poor fuel quality available here?” Schlickum said.
Malaysia is one of the very few countries in the developed world to still use Euro 2, making it impossible for car manufacturers to bring in engines that run on clean diesel fuel.
Car manufacturers that bring diesel engines into Malaysia must get rid of their particulate filters, as the diesel currently in use in Malaysia will block the filters, and this is still very bad for the environment.
The current taxation structure results in benefits only for selected car manufacturers, loss of total potential industry volume, lost revenue for the government, no impact on the environment and a poor reputation within ASEAN, whereas adopting a new taxation structure will increase the industry volume towards fuel efficient vehicles with low carbon footprints, hence bringing in more revenue for the government as well as more car manufacturers willing to invest in Malaysia.
Schlickum said that all he, and other luxury car manufacturers want, is a level playing field, where all car manufacturers have equal opportunity to produce and provide fuel efficient vehicles, as customers are important to them, therefore must be protected, and the only way this is possible is through a level playing field, not with only a select few receiving benefits from the current system.
“The way it is at the moment is unsustainable; they're going to kill the industry,” said Schlickum.
- WRITTEN BY FATIHAH RASHID, PUBLISHED ON MARCH 6, 2013 5:07 PM,
5 COMMENTS
As most Malaysians know, our country has a tax exemption for all hybrid vehicles with engine displacements of under two-litres (2,000cc), where the manufacturers of these vehicles aren't required to pay import and excise duties up to December 31 this year.
What many don't realise, however, is that this tax exemption negatively impacts those without hybrid technology, as the hybrid cars are cheaper, so consumers will opt for them instead of the non-hybrid cars that may be just as fuel efficient as their hybrid competitors.
The definition of fuel efficient vehicles in Malaysia at the moment doesn't address fuel efficiency as much as it emphasises on technology.
Any hybrid that is less than two litres is defined as fuel efficient, yet many feel that the taxation structure should be based on fuel efficiency or carbon emissions, not solely on technology used.
Instead of simply looking at the technology involved, carbon emissions and fuel efficiency should also be targeted to reduce the amount of carbon in the atmosphere.
As it is now, this tax exemption for hybrids only benefits the manufacturers that have the technology, and in the luxury car segment this only applies to Audi and Lexus.
Companies like Mercedes-Benz, which manufacture cars that have low carbon emissions and high fuel efficiency, will lose out to companies like Audi, as although their vehicles are environment-friendly, their vehicles don't qualify for the tax exemption because they don't utilise hybrid technology, leading people to choose their competitors who have the technology and are able offer vehicles at a cheaper price.
Vice President of Sales and Marketing, Mercedes-Benz Malaysia Passenger Cars, Kai Schlickum, suggests that Malaysia change the taxation structure, which is currently based on engine capacity and hybrid technology to be based on fuel consumption and carbon emission instead.
“Hybrid is only one way to achieve what targets everybody's setting; fuel efficiency and less pollution.
We have Blue Efficiency in every one of our cars that we offer here, in all our CKD models and CBU as well,” he said.
Most developed and developing countries in the world have a taxation structure based on fuel consumption and carbon emission, with Singapore recently forgoing their hybrid incentives in favour of a carbon emissions-based taxation structure beginning January this year.
“Singapore just got rid of their hybrid incentive; they had a hybrid incentive, and now it's carbon emission based and fuel consumption based, which is the only thing that makes sense.
Once you have that, you have a level playing field again, whereas now, the taxation structure benefits only a few, and exactly those that haven't invested millions into the economy here,” Schlickum said.
When compared with luxury hybrids, Mercedes-Benz models produce just marginally more carbon emissions than the hybrids and are just as fuel efficient, yet cost a lot more because of the hybrid tax exemption.
He also said that even though hybrids have the benefit of power, as the batteries generate instant torque, they aren't that much more fuel efficient as hybrids are weighed down by the batteries that weigh at least 100kg.
Mercedes-Benz has BlueTec diesel hybrid engines, but they can't run on Euro 2 diesel, which is the only type of diesel fuel available in Malaysia, instead they can only use Euro 4, which is why they are unable to bring the engines in for the Malaysian market.
“How can we, with confidence say we are doing our best part in Malaysia to improve the environment with the poor fuel quality available here?” Schlickum said.
Malaysia is one of the very few countries in the developed world to still use Euro 2, making it impossible for car manufacturers to bring in engines that run on clean diesel fuel.
Car manufacturers that bring diesel engines into Malaysia must get rid of their particulate filters, as the diesel currently in use in Malaysia will block the filters, and this is still very bad for the environment.
The current taxation structure results in benefits only for selected car manufacturers, loss of total potential industry volume, lost revenue for the government, no impact on the environment and a poor reputation within ASEAN, whereas adopting a new taxation structure will increase the industry volume towards fuel efficient vehicles with low carbon footprints, hence bringing in more revenue for the government as well as more car manufacturers willing to invest in Malaysia.
Schlickum said that all he, and other luxury car manufacturers want, is a level playing field, where all car manufacturers have equal opportunity to produce and provide fuel efficient vehicles, as customers are important to them, therefore must be protected, and the only way this is possible is through a level playing field, not with only a select few receiving benefits from the current system.
“The way it is at the moment is unsustainable; they're going to kill the industry,” said Schlickum.
