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ELV Proposal Included in Malaysia National Auto Policy Paper

Date: April 1, 2019

The Malaysian Reserve

Several proposals related to scrapping vehicles, or known as the end-of-life vehicle (ELV) policy, have been included in the National Automotive Policy 2019 (NAP2019) consultative paper.

The suggestions in the discussion paper entitled “Review of National Automotive Policy”, prepared by the Ministry of International Trade and Industry (MITI), listed several ELV-related measures.

The paper, among others, will discuss the need to develop an ELV system; promote voluntary vehicle inspection, an ELV ecosystem and remanufacturing activities; and to continue the rebuilt trucks transformation to remanufacturing.

The paper, sighted by The Malaysian Reserve (TMR), also listed cyber security consumer issues under the strategy on safety, environment and consumerism.

The NAP2019 consultative document will be deliberated by industry stakeholders before forming the final document of the country’s much-anticipated NAP2019.

The industry is also looking at ways to tighten cyber security for the automotive sector, expand the scope of vehicle type approval, conduct a study on recall mechanism and create a platform to address consumerism issues.

The paper also proposes the enforcement of the 4R2S — the automotive recycling industry which is expected to reach a value of about RM2 billion by 2020.

The 4R2S system — repair, reuse, recycle, remanufacture, services and spare parts — has been a key part of the automotive sector. The government wants to impose more supervision to protect consumers.

Industry players and critics viewed the ELV policy as being long overdue and it needs to be introduced to complete the automotive ecosystem in the country.

But some sections of the society had rejected the move, calling it unfair to owners who could not purchase new vehicles. The ELV was first announced during the NAP2006 roadmap.

Three years later, the government introduced the mandatory annual inspections of all vehicles above 15 years old.

The ELV programme resurfaced in 2015 when the government and carmakers agreed to share an equal commitment of RM5,000 for every vehicle scrapped. But the programme was discontinued due to public outcry.

Environmental concerns and safety issues are the two reasons behind the push for the ELV. Earlier generation vehicles produce more smog and do not meet today’s emission standards, as well as safety requirements.

A source told TMR that MITI and original equipment manufacturers (OEMs) have met on March 14 in the latest round of consultation on the NAP2019, including matters pertaining to the ELV and other key issues.

“It was quite a heated discussion. The NAP2019 (draft) is too ambitious. A lot of items are still unclear,” the source said.

The NAP2019 objectives include the next-generation vehicle (NxGV), mobility as a service and fourth industrial revolution.

The paper defines NxGV as a vehicle with energy-efficient vehicle status and has achieved at least Level 3 automation, which is conditional automation.

But the source within the industry questioned the practicality of such advanced vehicles in the local marketplace.

“Are the OEMs ready and can the local customers afford to buy them?” said the industry source.

A vehicle with conditional automation is defined as “a driver is a necessity, but is not required to monitor the environment and the driver must be ready to take control of the vehicle immediately”.

The highest level is full automation, referring to vehicles that are capable of performing all driving functions under all conditions. These are smart autonomous driving vehicles.

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