MARKET WATCH
ALL ABUZZ ABOUT NOTHING
talk of reduced car prices and tax becoming political ammo for debate , but nothing has really hit the target for consumers yet
The endearing Kancil was in production from 1994 until 2009 . A total of 722,223 Kancils were produced by Perodua .
By HanS CHEOng
M alaysia is probably
the only country in the world where the subject of car prices can become a topic of debate for politicians in order fish for votes . In a country where public transport is in a dismal state , cars , despite their inflated prices , remain a necessary inconvenience .
Even in neighbourhoods that are connected by KTM Komuter trains and RapidKL LRTs , the quality of service in terms of feeder buses , parking facilities as well as the issue of safety and security of commuters still leaves much to be desired .
In July last year , Parti Keadilan Rakyat ’ s strategy director Rafizi Ramli fired the first salvo when it promised the public that the party will slash car prices by reducing import , excise and sales tax , should it come to power in the next general election .
Rafizi was quoted as saying that a RM40,000 Perodua actually costs RM23,500 before a 60 per cent excise duty and 10 per cent sales tax is levied on it .
One online news media portal mentioned Rafizi ’ s example refers to a 1.5 litre Perodua while another says it is a Perodua Kancil .
Perodua declined to comment on the matter but pointed out that the difference in prices between a Labuan duty free zone Perodua model from one sold in Kota Kinabalu is only about RM 7,000 .
MNM would like to point out that contrary to the reports made by the two said online news portals , a 1.5 litre Perodua Myvi starts from RM50,913.50 , while the Perodua Kancil has been discontinued since July 2009 .
It should be pointed out that since the 2006 National Automotive Policy came into effect on 1-January 2006 , excise duties for passenger cars below 1,800cc is 75 per cent and not 60 per cent as claimed .
Putting aside the question of Rafizi being misquoted , or whether his promises are realistic or not , the only barometer in the game of politics is public support and Rafizi ’ s rhetoric has struck a deep chord in the hearts of many voters .
As far as garnering public support goes , the public voted Rafizi Ramli into second place on Malaysiakini ’ s list of Top 10 Newsmakers of 2012 , behind S . Ambiga .
In August , an English daily ran a report quoting an industry source saying that the revised National Automotive Policy will address the gradual reduction of car prices .
Rafizi would again hit out at his political rivals , demanding a clear message be sent out on what the government ’ s plan is on reducing car prices , adding that it was Pakatan Rakyat who first publicly mooted such an idea .
The topic would lay quiet for a few more months until February this year , when Minister of International Trade and Industry Datuk Seri Mustapa Mohamed announced in a press conference that car prices of cars imported from Japan and Australia will be gradually reduced .
A day before the press conference , the local media was abuzz , informing their readers that there will reduction in import duties for vehicles from Japan and Australia .
When the actual announcement was made the next day , news media , bloggers and the general public alike were busy regurgitating the same public relations fluff without conducting the necessary due diligence .
The headlines and news reports that came out gave the impression that a new round of tax reductions was underway .
This was despite the fact that the minister himself , had in a post-event briefing said very clearly that there are no new changes in the duty structure . Car companies were confused with the hype , and were calling us up for answers . It was a proverbial stirring a storm in a tea cup .
In truth , reduction in import duties for CBU ( completely built-up ) imported cars from Japan has been in place since 13 December 2005 .
The Malaysia-Japan Economic Partnership Agreement ( MJEPA ) came into force in 13 July 2006 .
Under MJEPA , import duty for CBU Japan vehicles have been reduced gradually for the past eight years already , with the savings transferred to customers in the form of more model choices at lower prices . The schedule of import duty reduction is categorised by vehicle type and engine capacity . To minimise shock permeating through the car financing business and used car trade , reduction in import duties began with a top to bottom approach , starting from luxury , high engine capacity vehicles .
Between 2006 to 2007 , import duty for CBU Japan vehicles above 3,000cc were
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