Don't count on low car prices
TigerTalkPublished: Jun 26, 2013 9:14 AM | Updated: Jun 26, 2013 9:52 AM
There was a time when tigers moved faster than almost any other thing on land. I know, I know, our distant cousins the cheetahs are generally considered to be the fastest, but you get the general drift.
And then came the automobile and us cool cats were beaten into second place. But never mind that, it just may be that the Malaysian public has a worse deal than us. Why? Because they pay among the highest prices for cars in the world - all that money for convenience and, yes, speed.
How come we ended up paying so much for cars, sometimes as much as two or more times than even developed countries? This may sound a bit tired, but we have no choice but to lay the blame squarely on former prime minister Dr Mahathir Mohamad. I know he has been blamed for many things before, but this he must really take the blame for.
You see, he had this vision of making Malaysia a car manufacturer, not by inviting those with the requisite expertise to set up here but to make our own car instead - the Malaysian car - initially with help of course, but almost 30 years later, still with help, of course.
Well, that was how Proton came about, with the first Saga - a Mitsubishi clone - rolling out in 1985. Subsequently we had Perodua. Its been quite a saga since. In a nutshell, so that Proton could make money, Mahathir imposed punitive taxes on all other cars and raised prices of cars for all Malaysians.
It was supposed to be temporary, but it has stayed since - in one guise or another. And it is not likely to be dismantled because the industry is well entrenched and has strong lobbies representing all the various inefficient parts. Why, Mahathir continues to be adviser to Proton (and Petronas) and we all know how much clout he has and how he wields it.
So it has become clear that the authorities are not going to cut taxes on imported cars - the excise duties will remain at between 75% to 105% and will reduce to around 40% only if there is the appropriate amount of local value-added - that means local manufacture or assembly.
That means excise duties - the main duty on cars - will not fall below 40% in any case but it also means that completely built-up units will never have a chance of duties falling below 75%.
Go to KiniBiz for more.
This TigerTalk article was written by P Gunasegaram.
And then came the automobile and us cool cats were beaten into second place. But never mind that, it just may be that the Malaysian public has a worse deal than us. Why? Because they pay among the highest prices for cars in the world - all that money for convenience and, yes, speed.
How come we ended up paying so much for cars, sometimes as much as two or more times than even developed countries? This may sound a bit tired, but we have no choice but to lay the blame squarely on former prime minister Dr Mahathir Mohamad. I know he has been blamed for many things before, but this he must really take the blame for.You see, he had this vision of making Malaysia a car manufacturer, not by inviting those with the requisite expertise to set up here but to make our own car instead - the Malaysian car - initially with help of course, but almost 30 years later, still with help, of course.
Well, that was how Proton came about, with the first Saga - a Mitsubishi clone - rolling out in 1985. Subsequently we had Perodua. Its been quite a saga since. In a nutshell, so that Proton could make money, Mahathir imposed punitive taxes on all other cars and raised prices of cars for all Malaysians.
It was supposed to be temporary, but it has stayed since - in one guise or another. And it is not likely to be dismantled because the industry is well entrenched and has strong lobbies representing all the various inefficient parts. Why, Mahathir continues to be adviser to Proton (and Petronas) and we all know how much clout he has and how he wields it.
So it has become clear that the authorities are not going to cut taxes on imported cars - the excise duties will remain at between 75% to 105% and will reduce to around 40% only if there is the appropriate amount of local value-added - that means local manufacture or assembly.
That means excise duties - the main duty on cars - will not fall below 40% in any case but it also means that completely built-up units will never have a chance of duties falling below 75%.
Go to KiniBiz for more.
This TigerTalk article was written by P Gunasegaram.
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