Motoring: Changes for the new year

Into the third week of the new year, the one thing Malaysians can count on is that 2019 will be an interesting one for the automotive industry.

With a new government in place, the new transport minister is quick to voice his concern and implement changes on existing policies. Anthony Loke in his first few weeks stopped non-governmental organisations (NGOs) from selling special vehicle plate numbers as it does not benefit the government.

“A successful NGO would only have to pay the government RM1million to get the plates, but the resale value could go up to RM20 million per plate. That in itself is a huge lost of revenue to the government,” said Loke in an interview with The Star.

He has since taken his stand on multiple issues under his purview such as unchanged Takata airbags, unpaid summonses by private and commercial vehicle owners, stricter monitoring for emergency lane abusers, ride hailing apps and the state of the country’s public transport.

Fairer for all – Petrol Prices

The biggest news came at the very start of 2019, with the government moving to once again set petrol prices based on a weekly float model creating a ripple effect which will affect not just motorists but all consumer products.

The new prices for RON 97, RON 95 petrol and diesel are to be announced every Friday and will take effect on Saturdays. Expect long queues at all petrol stations whenever a higher price is announced.

While some motorists may cry inconvenience at not having a standard pricing model, the revised weekly float system is the best option, for consumers, as it is reflective of global oil prices. The government has pledged that should oil prices rise higher than expected, the prices for RON 95 and diesel will be capped at RM2.20 and RM2.18 per litre respectively.

The news of a float model comes as a bitter pill to swallow for the Petrol Dealers Association of Malaysia (PDAM) as it results in its members losing money should oil prices go down. Oil companies currently have the upper hand as they can wait until oil prices rise before delivering fresh supply, hampering the profit margins for privately owned petrol stations that hold an average of three to five days’ worth of fuel in their respective tanks.

PDAM is already in talks with some oil companies to help manage the profit margin issue faced by retailers, but the review of petrol dealers’ margin by the government is the most logical and positive step for the time being.

Flying the flag – National SUVs

After losing out to Perodua in terms of market shares for many years, Proton is aiming to bounce back with it’s first ever SUV – the X70.

This is the first collaborative vehicle to be released by Proton since since Zhejiang Geely inked a 49.9% stake in the company. It is reasonable for Proton to have such high hopes for the new vehicle as the SUV segment has experienced continuous growth in recent years. The market for SUVs is still small compared to passenger cars, but Proton has been wise to focus on improving consumer perception and win back customer confidence.

Doing so successfully will in turn, boost sales for its range of passenger cars – the national automakers bread and butter. There have already been more than 15,000 bookings for the X70 since last September, which is an encouraging number for a vehicle that was officially launched  only a month ago.

For now, the X70 maybe produced entirely in China and imported into Malaysia as fully built-up units, but it is a good start.

Perodua also has its own SUV offering – the Aruz. Having dominated the local market with the highest number of vehicles sold in 2016 and 2017 (figures for 2018 have yet to be released), the company is keen to ensure it maintains its top spot.

The Aruz is positioned as a budget or compact seven-seat SUV and should not find any direct competition from the X70, which has higher specs and power output.

The company has seen promising signs upon opening for booking with 300 bookings after the first day. With such high numbers from both national manufacturers, we can expect the number of SUVs to double or even triple on the road by year end.

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