AUTOMOTIVE component makers are calling on the government to defer the implementation of the “sudden upward revision” of the electricity tariff surcharge by more than 566% to between 20 sen and 27.7sen/kWh beginning Jan 1, 2023, from 3.0 sen/kWh currently.

Perodua Suppliers Association president Helmi Sheikh Mahmood said the increase “will have a profound impact on every industry, regardless of size as the net result will be shared by all”.

Helmi said this in a joint statement on behalf of the Proton Vendors Association, Toyota Suppliers Club, Honda Malaysia Suppliers Club and Malaysian Automotive Component Parts Manufacturers Association.

He said the manufacturers understand the government’s intentions to remove subsidies from the medium voltage and high voltage industrial users as a way to mitigate the impact of high coal costs on the energy sector.

“The soon-to-be-implemented tariff, coupled with the recently revised Employment Act 1955 (Amended 2022), will be too heavy for us to bear,” Helmi said.

He said the amended act, which saw an increase in the minimum wage level by 25% to RM1,500 from RM1,200, coupled with the reduction of weekly work hours from 48 hours to 45 hours as well as increasing the threshold of those who are entitled to overtime compensation, have already increased overhead costs considerably.

“These two factors (tariff hike and the revised Employment Act) will be too heavy for us to absorb and as a result, the industry will have to pass these costs on to customers,” he said.

“This would have a devastating impact on the automotive industry as this would result in a massive increase in vehicle prices.

“We, too, wish to serve Malaysia and we ask the government to delay the increase in power tariff and work with us to ensure any changes, with regard to policies, laws, taxes, incentives, tariffs or other initiatives will have the desired effect.” – Bernama, December 29, 2022.