Motor vehicle sales in Malaysia dropped 10 percent in October from a year ago to 34,262 units, but were 0.5 percent higher from September, according to figures published today.

Despite the government's announcement that car prices would not fall under the Association of Southeast Asian Nations (Asean) Free Trade Area (Afta), consumers appeared to be still holding out for cheaper prices, The Star quoted a report by the Malaysian Automotive Association (MAA) as saying.

In the passenger car market, sales of national cars declined 27 percent year-on-year to 20,767 units but non-national car sales soared 89 percent to 5,511, according to the MAA.

This pushed vehicle sales down eight percent year-on-year to 342,730 units in the first 10 months of the year. Sales of national passenger cars during the period fell 18.6 percent from a year ago to 230,132 units, while non-national car sales grew 63.8 percent to 42,651 units.

Proton suffers

An analyst with a local research house said sales of national carmaker Proton have suffered because consumers were anticipating tariff adjustments from January and waiting for new Proton models expected to be launched next year.

A narrowing of the price gap between Proton cars and non-national models such as Toyota's Vios and Honda's City as well as other South Korean makes also led to many motorists switching to foreign brands, he said.

In comparison, the analyst said second national carmaker Perodua was able to maintain its sales volume because its cars were smaller and cheaper.

Tariffs on imported cars in Southeast Asia fell below five percent in January under Afta but Malaysia obtained a reprieve for its auto industry until 2005.

The government has said it would impose excise duties on imported cars from January to offset losses in revenues from import tariffs but it has not unveiled the new tariff structure. Japan has expressed concern the move may penalise its carmakers if the new taxes discriminate between national and non-national cars. - AFP