New car policy to drive prices down
LIBERALISATION: Competition will cut prices, says Mustapa
KUALA LUMPUR: BY 2017, car prices will be 20 to 30 per cent lower as the government liberalises the automotive sector to woo foreign carmakers to invest here under the revised National Automotive Policy (NAP).
To this end, a car price reduction framework has been developed by the International Trade and Industry Ministry, minister Datuk Seri Mustapa Mohamed said. The framework consists of a mix of measures to be undertaken by the government and industry players.
Consumers have long complained that foreign cars are too expensive for many Malaysians.
Mustapa said liberalisation would create a more competitive environment and enable greater market forces, leading to more competitive prices.
Speaking after announcing NAP 2014 here yesterday, Mustapa said industry players had a vital role in making their operations competitive to reduce cost. This has seen prices of certain car models go down by up to 17 per cent last year.
He said models such as Proton Saga SV, Proton Persona SV, Perodua Viva, Alza Myvi S-series, the new Honda Jazz and Nissan Almera were introduced at reduced prices of between three and 17 per cent. These models accounted for 30 per cent of market share last year.
This year, more new models and variants will be introduced at competitive prices and these new models are forecasted to capture 55 per cent of market share.
Asked if excise duties on cars would be reduced, Mustapa said the government was open to the prospect when the fiscal situation permits.
On the issue of Approved Permits (AP) to import cars, he said the government would appoint a body to review the policy after the Chinese New Year break.
He stressed that the government was not backtracking on the issue.
NAP 2009 had set the termination of open AP by Dec 31, 2015 and franchise AP by Dec 31, 2020.
A study would be done to assess the impact of this termination on Bumiputera participation in the automotive industry, he said.
"The open AP issue is a very complicated one and it is not as straightforward as we would like it to be. So, we are engaging stakeholders and whatever decision we make will be in the best interest of the country."
NAP 2014 will allow foreign automakers to build smaller passenger cars here, in a bid to turn Malaysia into a leading manufacturer of energy-efficient vehicles.
The changes, effective immediately, will for the first time allow foreign players to build vehicles with engine capacity of 1.8 litres or less if the vehicles qualify as energy-efficient.
Such projects would not need domestic investment partners and would enjoy incentives such as tax breaks, Mustapa said.
He said the new NAP would transform Malaysia's automotive industry to be one of the more important components of the economy. It is expected to create 150,000 jobs by 2020.
Last year, the industry contributed RM30 billion to the national gross domestic product, employing some 550,000 people.
He added that by 2020, local skilled and semi-skilled workers would replace 80 per cent of foreign workers in the automotive manufacturing sector.
Mustapa also announced that NAP 2014 would provide a financial package of RM2 billion between now and 2019 to increase the competitiveness of Bumiputera companies in the automotive industry, from human capital to technology development.
Read more: New car policy to drive prices down - General - New Straits Times http://www.nst.com.my/nation/general/new-car-policy-to-drive-prices-down-1.467117#ixzz2qzFgmtE6
