According the article from The Nation, Malaysian Automotive
Industry is expected to continue growing by 4.2 per cent this year to reach
675,000 units based on vehicle sales record in 2013, said Kavan Mukhtyar,
partner and head of automotive transport practice, Asia Pacific, at the growth
consulting firm. Malaysia may also transform into a production hub for
energy-efficient vehicles (EEVs) by 2020. The growth of vehicle sales may
contributed by lower expectation of price reduction by consumers and full
exemption of import and excise duty on hybrids. However, he cautioned that
continued tightening of credit and subsidy rationalism would have a restraining
effect on growth of vehicle sales. (The Nation 2014)
Nowadays, buying a car
in Malaysia is an expensive affair. A US blog has ranked Malaysia’s car price as
the second most expensive in the world, losing only to its neighbour Singapore.
(Harakahdaily 2013) In my opinion, one of the reasons that caused high car
prices is high import duties and excise duties levied on cars. Proton and
Perodua, local vehicles can be exempted from high duties, whereas the imported
cars in Malaysia attract between 140% and 300% for import duties and excise
duties. (Mohamad & Kiggundu 2007)
Why do we as Malaysian
need to suffer by paying high taxes while buying a car? The reason is because
of the National Automotive Policy (NAP) which implemented to protect the local
car manufacturing industry. Malaysia’s local
car manufacturing industry is mainly dominated by Proton and Perodua and they
are heavily supported by Malaysian government through NAP. Compared to Thailand
and Indonesia, the prices of vehicle are significantly lower than Malaysia. Nowadays,
Thailand and Indonesia’s vehicle production has overtaken Malaysia. Thailand
becomes the largest automotive market in Southeast Asia and a regional vehicle
production hub and export base for the world’s top car manufacturers like
Toyota and Ford, same goes to Indonesia. Malaysia has once restricted the
investment by several car manufacturers like Toyota in order to protect the
sales of Proton and Perodua, local car manufacturers through NAP.
Why the vehicles sales in
Malaysia are hiking still while the car is expensive? In my opinion, one of the
reasons that contributed to the growth of vehicle sales is limited access of
public transport in Malaysia, as well as in city area. As the Mass Rapid Train
(MRT) system and Light Rail Transit (LRT) extension are now developed to solve
the overflow of vehicles and traffic congestion in city area, I believed that
the vehicles sales will drop dramatically once the public transport system has been
developed well. In addition, the tax exemption for hybrid vehicles and electric
vehicles which scheduled to end in 2013 will make a great impact on vehicle
sales in Malaysia this year.
In my opinion, in order
to sustain Malaysia’s vehicle industry, Malaysian government should be
open-minded and invite more worlds’ top manufacturer like Toyota, Honda, Ford, Mitsubishi
and others to invest in Malaysia. Hence, Malaysia can become the production hub
and export base for all kinds of vehicles, not only EEVs. At the same time, the
overall household debts in Malaysia can be reduced significantly as car prices
in Malaysia are reduced. Besides, the
bankruptcy cases which related to car loans can be indirectly reduced.
References
Vehicle sales in Malaysia expected to expand by
4.2%. 2014, The Nation, viewed 12 April 2014, <http://www.nationmultimedia.com/business/Vehicle-sales-in-Malaysia-expected-to-expand-by-4--30223967.html>
Harakahdaily
2013, Cars in Malaysia the 2nd MOST EXPENSIVE in the world, Malaysia
Chronicle, viewed 12 April 2014, <http://malaysia-chronicle.com/index.php?option=com_k2&view=item&id=189961:cars-in-malaysia-the-2nd-most-expensive-in-the-world&Itemid=2#axzz2yJX7LjXZ>
Mohamad,
J., & Kiggundu, A. T. 2007, The Rise of the Private Car in Kuala
Lumpur, Malaysia, IATSS
Research, Kuala Lumpur.
