30pct car-price cut in five years 'not a big deal'
Aidila RazakPublished: Jan 22, 2014 12:45 PM | Updated: Jan 22, 2014 6:19 PM
The Malaysian Automotive Association (MAA) does not think the expected gradual reduction of 20-30 percent in car prices through the National Automotive Policy 2014 is actually a significant reduction.
UPDATED 3.05PM
The MAA thinks the auto industry has tricks to get around the NAP.
The Malaysian Automotive Association (MAA) does not think the expected gradual reduction of 20-30 percent in car prices through the National Automotive Policy 2014 is actually a significant reduction.
"Last year, at the end of the year in November and December, some car manufacturers gave discounts of RM15,000 so what is 20-30 percent?
"These are tricks - part and parcel of the auto industry's way," MAA president Aishah Ahmad (second from left) said.
Asked if this means the MAA sees the reduction expected is "not much at all" she said she didn’t think it was.
She also stressed that the price reduction is over five years, and that not all models will be able to cost less.
She claimed that much of the reduction in prices in 2013 was actually through removing features from a car, and is not a reduction on the exact model.
In launching the National Automotive Policy 2014, International Trade and Industry Minister Mustapa Mohamed (left) said that prices of popular models, which take up 30 percent of the market, have gone down by 3-17 percent from 2013.
With the NAP's framework of competition and industrial incentives, he said, the government expects car prices to reduce gradually by 20-30 percent by 2018.
This includes allowing manufacturing licences to any manufacturer who can produce energy efficient cars and incentivising localisation of manufacturing.
Excise duties remain
However, excise duties which can be as high as 105 percent per unit will remain, due to the government’s poor financial standing.
To this, Aishah said that with excise duties constant, the only way car prices can come down is through changing specifications, reducing production costs, economies of scale and duty cuts through localisation.
On the NAP, she said the MAA "cannot say that it is disappointing" but is relieved it has been launched at long last.
"We were waiting for so long year after year, and at least now they have announced the energy-efficient vehicle focus, with no conditions set.
"(But) details on the incentives, industrial players still don't really know and a few things are still not announced," she said.
These include the outcome of Approved Permits for imports, which the government requires a few more months to study.
"So we have to wait," she said.
She said the industry was hoping for an end of vehicle life policy, but this did not materialise beyond voluntary vehicle roadworthiness testing.
"But it's voluntary inspection, who will go?" she asked.
She also saw the government's goal of total industry volume of one million vehicles by 2020 is "really optimistic".
She said that the NAP will have little impact on the industry in the first year, but that is still to be seen.
However, she said the decision to open up manufacturing licences is a step in the right direction as Malaysia had been very closed in this respect.
"Last year, at the end of the year in November and December, some car manufacturers gave discounts of RM15,000 so what is 20-30 percent?
"These are tricks - part and parcel of the auto industry's way," MAA president Aishah Ahmad (second from left) said.Asked if this means the MAA sees the reduction expected is "not much at all" she said she didn’t think it was.
She also stressed that the price reduction is over five years, and that not all models will be able to cost less.
She claimed that much of the reduction in prices in 2013 was actually through removing features from a car, and is not a reduction on the exact model.
In launching the National Automotive Policy 2014, International Trade and Industry Minister Mustapa Mohamed (left) said that prices of popular models, which take up 30 percent of the market, have gone down by 3-17 percent from 2013.With the NAP's framework of competition and industrial incentives, he said, the government expects car prices to reduce gradually by 20-30 percent by 2018.
This includes allowing manufacturing licences to any manufacturer who can produce energy efficient cars and incentivising localisation of manufacturing.
Excise duties remain
However, excise duties which can be as high as 105 percent per unit will remain, due to the government’s poor financial standing.
To this, Aishah said that with excise duties constant, the only way car prices can come down is through changing specifications, reducing production costs, economies of scale and duty cuts through localisation.
On the NAP, she said the MAA "cannot say that it is disappointing" but is relieved it has been launched at long last.
"We were waiting for so long year after year, and at least now they have announced the energy-efficient vehicle focus, with no conditions set.
"(But) details on the incentives, industrial players still don't really know and a few things are still not announced," she said.
These include the outcome of Approved Permits for imports, which the government requires a few more months to study."So we have to wait," she said.
She said the industry was hoping for an end of vehicle life policy, but this did not materialise beyond voluntary vehicle roadworthiness testing.
"But it's voluntary inspection, who will go?" she asked.
She also saw the government's goal of total industry volume of one million vehicles by 2020 is "really optimistic".
She said that the NAP will have little impact on the industry in the first year, but that is still to be seen.
However, she said the decision to open up manufacturing licences is a step in the right direction as Malaysia had been very closed in this respect.
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