In view of
the market liberalisation under the ASEAN Free Trade Area (AFTA), the Malaysian
automotive component industry must position itself to be world-class suppliers
to meet the challenges ahead. The trend is towards production of high quality
products through common design and specification of parts and compliance with international (eg: ISO 9000) and national
quality standards. It is envisaged that automotive component
manufacturers will soon have to comply with environmental issues such as
recyclable parts, reduction of emission and ISO 14000, which deals with
environmental management system and the ability to conduct environmental audits
and performance evaluations.
Tariffs, regulations and quotas
To protect the local automotive industry, the Malaysian
government imposes several measures. Local content requirements of 45 to 60 per
cent for passenger and commercial vehicles and 60 per cent for motorcycles are
required. An import licence (approval permit) is required for imports of motor
vehicles, which limits importers to a fraction of total market volume for
completely-built-up units.The Ministry of International Trade and Industry
gives approved permits based on quota. Imported vehicles attract extremely high
tariffs of up to 300 per cent, based on engine capacity. The “Mandatory Deleted Item Policy” prohibits car and motorcycle
assemblers and franchise holders from importing all components listed as
‘mandatory’ (such as tyres, batteries, mudflaps, seat belts, engines and shock
absorbers, etc) for use in local car and motorcycle assembly.
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