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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