The Malaysian Automotive Association (MAA) has issued a statement indicating that the government’s targeted diesel subsidy programme is unlikely to have a significant impact on the total industry volume (TIV) of vehicle sales. This conclusion is based on the fact that diesel vehicles account for less than 12 per cent of the total vehicles nationwide, and the government is providing subsidies to eligible recipients and sectors.
The association has underscored that the government is continuing to provide subsidies to the bottom 40 per cent (B40) income group, eligible commercial vehicles, and diesel vehicle users in Sabah and Sarawak. However, MAA has also emphasized the importance of providing incentives or energy subsidies to the latest technology such as hybrid electric vehicles, battery electric vehicles, and fuel cell electric vehicles.
While MAA acknowledges that the approved subsidies do not cover all eligible sectors, it has stressed the need for an accurate and efficient rebate mechanism to prevent transport operators from increasing transport rates that could have an impact on the public and national competitiveness.
With regards to vehicle sales, the MAA anticipates that this year’s TIV will remain at the forecasted level due to the high demand for commercial diesel vehicles, pickup trucks, and vans. The association believes that while consumers may initially exercise caution, they will not refrain from purchasing diesel vehicles as they are essential for various industries such as construction, plantation, logistics, tourism, and transportation.
In Malaysia, diesel engines are primarily utilized in pickup trucks, vans, and commercial vehicles for both private and business purposes. These vehicles play a crucial role in the operations of key sectors such as construction, plantation, logistics, tourism, and transportation.
On June 10, the Ministry of Finance set the retail price of diesel in Peninsular Malaysia at RM3.35 per litre, and at RM2.15 per litre in Sabah, Sarawak, and Labuan from June 13 to 19, 2024. This move is expected to have minimal impact on vehicle sales, as the demand for diesel vehicles continues to remain strong. The MAA believes that the implementation of the targeted diesel subsidy programme will have little effect on the overall TIV of vehicle sales.