Green light for auto assembly plants a welcomed move

KUALA LUMPUR: Analysts were positive on the Ministry of International Trade and Industry’s (MITI) green light for all automotive assembly plants covering vehicle and component manufacturing to continue operations, with the activity restored to the essential services list as at January 16, 2021.

The ministry has reinstated automotive manufacturing to the approved list of services in economic sectors allowed to operate during the second movement control order (MCO 2.0).

“Vehicle production and component manufacturing were included in the initial directive issued on January 12, 2021, but an update to the document less than 24 hours therea er saw them being omi ed, with a specific footnote mentioning that automotive assembly and manufacturing activities were no longer included in the permi ed list,” the research arm of Kenanga Invesment Bank Bhd (Kenanga Research) said in its update.

“Now, in another U-turn, MITI has given the green light for all automotive assembly plants covering vehicle and component manufacturing to continue operations, with the activity restored to the essential services list as at January 16, 2021.

“We welcome this decision as a positive development for the automotive industry supported by the extension of Sales and Service Tax (SST)-exempted sales up to June 30, 2021 to clear back-logged orders.”

Previously, the ban was applicable only to states in which the MCO is in effect, specifically Kuala Lumpur, Selangor, Johor, Penang, Melaka, Sabah, Putrajaya and Labuan.