BMW still awaiting clarity on EEV incentive

KUALA LUMPUR (Feb 19, 2014): One month after the announcement of the revised National Automotive Policy (NAP 2014), BMW Group Malaysia is still waiting for further clarification from the government on the actual exemptions for locally-assembled energy efficient vehicles (EEV) under the new policy, said its managing director and CEO Dr Gerhard Pils.
According to Pils, all the vehicles introduced by BMW Malaysia Sdn Bhd, the joint venture between German marquee Bayerische Motoren Werke (BMW) AG and local conglomerate Sime Darby Bhd, fall under the category of EEV and therefore should be entitled to the EEV incentive under the NAP.
"We don't know what will be the incentive. We are still in discussion with the government to seek clarification," he told pressmen in a briefing here yesterday.
"What is our tax advantage for introducing EEV? If somebody tells me how large the tax advantage I'm getting in Malaysia, we might even transfer (production plant) from Thailand to Malaysia, but we need to know that," said Pils, asserting that the whole automotive industry in Malaysia is directionless on the market development.
Pils also urged the government to provide tax benefits for innovative advanced technology, before the premium automaker can consider the idea of introducing the BMW i series, its electric and plug-in hybrid electric vehicles in Malaysia.
"No, we cannot produce BMW i series now, because the infrastructure is not here and the volume would be small," he said.
Pils opined that the government should focus on helping the development of the new technology as well as the highly innovative electric car.
"If we don't get tax exemption just because the electric vehicles are not assembled here, the country will not develop in this modern innovation. My strong proposal to the government is to give us tax exemption, which Malaysia does not offer at the moment," said Pils.
When the NAP was announced on Jan 20, 2014, BMW Group Malaysia had said it is looking for more clarity on what the actual exemptions to EEV assembled in Malaysia will be under the policy. To date, no update has been made, as the discussion is still at the early stage.
Commenting on the opportunities present in the local market, BMW Group's Asia, Pacific and South Africa senior vice president Hendrik von Kuenheim opined that Malaysia is moving in the right direction towards transforming into a viable hub for the assembly and manufacture of advanced automotive technology.
Following the record performance in 2013, BMW Group Malaysia is targeting another record-breaking year in 2014, said Pils.
BMW Group Malaysia saw a total of 7,974 BMW, MINI and Motorrad vehicles delivered in 2013, charting an all-time high of 14% growth from 6,988 in 2012.
"We will not reveal (sales target) at the beginning of the year, but you can be very sure that 2014 will be a better year than 2013," he said.
Its sales performance in 2013 mirrors that of its parent company, the BMW Group, which achieved 6.4% increase in sales last year, delivering a total of 1,963,798 vehicles globally.
On another note, Pils said BMW Group Malaysia is set for the local assembly of the BMW 3 Series Gran Turismo, the 14th BMW variant to be assembled in the country, at its plant in Kulim, Kedah.
In 2013 alone, BMW introduced locally assembled variants of the BMW 1 Series, BMW X3 and the MINI Countryman.
The Kulim plant has a production capacity of making 7,000 vehicles a year, contributing more than 90% to the sales of BMW Group Malaysia last year. The addition of a second line, will see production capacity increased to 8,000 vehicles this year.