Proton Calls For End-Of-Life Vehicle (ELV) Policy

Proton hopes that the Malaysian government will consider and implement an end-of-life vehicle (ELV) policy as part of the upcoming Budget 2011. Proton believes that the policy, which mandates old cars beyond a certain age to be taken off the roads, can rejuvenate the local automotive industry, which has reached saturation in terms of volume.

“We understand it is a very costly exercise but we are willing to sit with the government on how both industry players and government can play a role”, Proton Managing Director Datuk Syed Zainal Abidin Syed Mohamed Tahir said, citing examples of how the governments of various countries such as Japan, South Korea, Singapore and Indonesia have provided incentives to ensure that old cars, which tend to be less safe and less efficient, are no longer allowed on the roads.

The crucial factor that determines the viability of the ELV policy boils down to incentive. While the policy will render the driving of old cars illegal, forcing owners to give up their cars, the government must ensure that affected owners are properly and sufficiently compensated, either on the basis of buying a subsidised new car or other monetary terms. If well-executed by the government, the ELV policy can boost the local automotive industry, creating demand and contributing to economic growth.

However, the government's inadequacy in crafting well thought-out policies is apparent from the recent fuel subsidy plan, which took years to materialise but still leaves plenty of room for exploitation. The government's lack of determination in pushing through tough decisions can also be seen from the sudden decision to not implement the planned ELV policy laid out in the latest National Automotive Policy (NAP). If there is to be an ELV policy, it all points to a poorly conceived one that most likely will not be put into practice.