MNM Issue 3 vol 3 | Page 19

SCHEDULE OF IMPORT DUTY REDUCTION UNDER MALAYSIA-JAPAN FTA Vehicle type Engine capacity 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Passenger cars

MPV

4x4

reduced from 50 per cent to 35 per cent . By 2010 , the rate has been reduced to zero per cent .

The reduction in import duties coincided with introduction of Japanese luxury brands like Lexus and Infiniti .

Lexus ’ official presence in Malaysia began in 2006 with a single outlet in Mutiara Damansara . In parallel with reduction in import duties , Lexus expanded its network and today there are five Lexus Centres in Malaysia , three in Klang Valley , one in Johor and one in Penang .

Vehicles below 2,000cc will take a more gradual reduction rate . In 2006 , the rate was 50 per cent . This year it came down to 15 per cent and by 2016 , import duties will be eliminated completely .

Malaysia negotiated free trade agreements ( FTA ) with Australia in March 2012 , with the FTA coming into effect this year .

Although it is a commendable move to expand Malaysia ’ s trade , the FTA has little effect ( if any ) on our automotive industry .

Australia has little interest in vehicle manufacturing and only three brands . Only GM- Holden , Ford and Toyota have manufacturing facilities in the country . Australia ’ s only export to the Asean region is the Ford Territory SUV to Thailand , which is limited to a few hundred units a year .

Holden also exports several left hand drive sedan models under the Chevrolet badge to the Middle East while Toyota exports a different variant of the Camry sedan that is unsuitable for our local demands , also in left hand drive configuration to the Middle East .

Even with duties reduced to zero , there is little that

CHANGES IN EXCISE DUTY OVER THE YEARS Vehicle type Engine capacity 2004 2006 2007 - present

Passenger cars

MPV

4x4

Australia has to offer to our market . To say that there will be a reduction in prices of cars imported from Australia is ... well , meaningless .

Fans of Holden V8 sedans should also note that large , rear wheel drive fuel guzzling sedans are a dying species even in Australia .

A Thailand made Toyota Hilux is Australia ’ s top selling model while a Japan made Mazda 3 is the top selling private car .

The only tangible benefit from the Malaysia-Australia FTA is the export of the Australian-made 2.5 litre AR series Toyota engines for our locally made Camry sedans . Australia will now join Thailand as part of Toyota ’ s multisourcing network strategy in the region .

After spending half a day or more trying to get to the bottom of the hype , car

Below 1,800cc 60 75 75 1,800 - 1,999cc 70 80 80 2,000 - 2,499cc 80 90 90 2,500 - 3,000cc 90 105 105 Above 3,000cc 100 125 105 Below 1,500cc 30 60 60 1,500 - 1,799cc 30 65 65 1,800 - 1,999cc 40 75 75 2,000 - 2,499cc 70 90 90 2,500 - 3,000cc 80 105 105 Above 3,000cc 90 125 105 Below 1,800cc 50 65 65 1,800 - 1,999cc 60 75 75 2,000 - 2,499cc 70 90 90 2,500 - 3,000cc 80 105 105 Above 3,000cc 90 125 105

companies found themselves asking , what was the point of announcing something that everyone in the industry should have already known ?

If the point was to return fire to the shrewd Rafizi Ramli ’ s populist message , it only goes to show how little is achieved when leaders lose sight of the bigger picture .

While we applaud any move to promote competition and deliver better value to consumers , the correct question that everyone should be asking is how will clean , sustainable mobility for Malaysians be promoted .

There is no country in the world that is able to build roads at a faster rate than the increase of vehicle population . It doesn ’ t matter how much your car is valued at , a car ’ s practical value becomes naught if you are unable to get anywhere when roads become

While reduction in import duties are addressed by FTAs with their respective country of origin , excise duties and sales tax however , are not . Judging by movements in excise duty structure in the past , we have little reason to believe that car prices as a whole , will be reduced in sufficiently large quantum to deliver any real meaning to a consumer . While import duties are being reduced , there has been a corresponding increase in excise duties over the past decade . Excise duties are levied on goods or services produced or consumed within the country . Presently , MITI ’ s official stance is that the government is conducting a study on excise duty , adding that any reduction in excise duty must not adversely affect industry stakeholders .

gridlocked .

A long term sustainable land transport road map involves curbing private car usage and promoting public transport .

In all internationally recognised metrics to measure quality of living , be it the United Nations Human Development Index or the Mercer Quality of Living Survey , ownership of cars is not even a factor for consideration . The quality of air and public transport service however , is .

The cars that we drive have no direct relation to our personal wellbeing .

Whichever party comes into power , they should be reminded that Malaysia is a signatory to the UN Decade of Action Road Safety plan , which aims to halve road fatalities by 2020 . Among the key performance indicators Malaysia will be measured is use of public transport .

I S S U E 3 | M N M 2 0 1 3

17