Pekema urges gov’t to assist Bumiputera automotive entrepeneurs make the transition from ICE to EVs

For the upcoming Budget 2027, parallel importer association Persatuan Pengimport dan Peniaga Kenderaan Melayu Malaysia (Pekema) has urged the government to focus on assisting Bumiputera automotive entrepreneurs in transitioning from businesses dealing in imported, used internal combustion engine (ICE) vehicles to the electric vehicle (EV) ecosystem.

According to Pekema president Datuk Mohamed Nazari Noordin, the shifting landscape of the national automotive industry requires appropriate policy support for Bumiputera entrepreneurs to enable them to adapt their business models and remain competitive, as Utusan Malaysia reports.

He said Pekema has submitted three key requests to the government for Budget 2027, which is to carry out reforms to the tax and import duty structure, offer specific incentives for the transition to EVs, and priced easier access to financing and credit guarantees for Bumiputera small and medium-sized enterprises (SMEs).

“We hope Budget 2027 focuses on refining the tax and import duty structures to ensure fairness and competitiveness for industry players. These structural improvements would have the potential to transform Malaysia into a more competitive regional automotive hub, while enabling the government to balance national revenue needs with the business viability of Bumiputera importers,” he told the publication.

Pekema urges gov’t to assist Bumiputera automotive entrepeneurs make the transition from ICE to EVs

He stated that the issue is particularly crucial for dealers of reconditioned vehicles, who are facing a shifting market landscape driven by government efforts to strengthen local vehicle assembly. He said that Pekema is ready to engage with the government to discuss the industry’s issues and challenges, including finding approaches that ensure the automotive sector’s transformation benefits all stakeholders.

He added that the government needs to provide specific incentives to assist Bumiputera entrepreneurs in transitioning from an ICE business model to an electric one. “Pekema supports the national automotive policy (NAP), which focuses on developing a sustainable automotive ecosystem, including the transition to EVs and new technologies,” he said.

“However, Bumiputera entrepreneurs require appropriate support so they are not left behind amidst shifts in technology and business models,” he added.

Necessary support would include assistance for CKD local assembly of EVs and component manufacturing, the development of charging infrastructure as well as workforce training and certification. He said the government should provide grants or tax incentives for workforce training in EV technology, in addition to helping entrepreneurs develop service and 3S centres equipped to handle new-generation vehicles.

“Entrepreneurs need not only change the products they sell but also invest in equipment, workforce skills, and service facilities to meet the demands of EV technology. Therefore, flexible financing facilities are crucial to help entrepreneurs make this transition,” he said.

To this end, Pekema urged the government to provide special financing schemes with low or flexible interest rates for Bumiputera automotive SMEs, specifically for equipment purchases, training, and business expansion.

He added that credit guarantees through government agencies, such as the Syarikat Jaminan Pembiayaan Perniagaan (SJPP), are also vital to facilitate entrepreneurs in securing financing from financial institutions.

With regards to the ending of tax incentives for fully-imported CBU EVs, Pekema acknowledged that the move is part of the government’s effort to encourage local assembly. Mohamed Nazari said that while the measure could pose short-term challenges, particularly concerning consumer demand and the ability of entrepreneurs to adapt to market changes, the transition would strengthen the local industry and attract more investment into the EV ecosystem in the long run.