Prime Minister Dr Mahathir Mohamad was reported recently to have said that the government has no plans to introduce non-tariff barriers for the automotive sector in 2005. He said the government was confident that Proton and Perodua would be more efficient and cost-effective by 2005.

However during the same press conference Mahathir was also reported to have said that countries should be allowed to "relook" the agreement if they believe there is a mistake, hinting that Malaysia may need to relook at certain parts of the Asean Free Trade Area (Afta) agreement, particularly in respect of rice and cars.

EON managing director Adzmi Abdul Wahab responded to the statement by stating that the local automotive industry might not be able to compete with giant motor vehicle manufacturers when the market opens up in 2005 and that EON welcomes a relook on the impact of Afta on the local car industry while both Proton and EON are preparing and taking measures to be ready (by 2005).

Therefore the prime minister's recent statement has still not cleared the air on what is in store for the automotive industry in 2005.

In January this year Mahathir was reported as having said that the government will need to introduce new forms of taxation to make up the reduction in import duty when Afta and World Trade Organisation (WTO) agreements take effect, giving rise to speculation that Malaysia may choose to implement a Singapore-style Certificate Of Entitlement (COE) levy system for purchase of new cars.

Then in February, the International Trade and Industry Minister Rafidah Aziz was reported as having said, "Please don't expect that the moment we bring down the tariff to 20 percent, cheap imported cars will come in" and she went on to indicate that the government may implement other forms of taxes to recoup lost revenue echoing the prime minister's earlier statement on the need to introduce new forms of taxation to make up the reduction in import duty when Afta and WTO agreements take effect.

Last month she was quoted as having said that the government will not be producing any guidelines on the implementation of the Afta agreement in respect of tariff reduction on cars yet, "as it has not decided on what to do come 2005. It is still a long way off."

In is very unfortunate that the government has chosen to keep us in the dark as to its plans as to the implementation of the Afta agreement in respect of the automotive industry.

To avoid a sudden drop in car prices in 2005, the government needs to introduce a scheme of gradual reduction of tariffs on cars from now.

The public has a right to know what is in store come 2005 as the purchase of a car is probably the second most important expense after a house for most people.

In 2001 alone there were nearly 400,000 vehicles sold in Malaysia.

Therefore the government should as soon as possible make public its guidelines for the implementation of the Afta agreement pertaining to the automotive sector to enable us to make an informed choice the next time we purchase a car. After all 2005 is really not that "a long way off".