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
Below 2,000cc
45.5
40.9
36.4
31.8
27.3
22.7
18.2
13.6
9.1
4.6
2,000cc to 3,000cc
41.7
33.3
25.0
16.7
8.3
Abolished
Above 3,000cc
35.0
20.0
5.0
5.0
Below 2,000cc
45.5
40.9
36.4
31.8
27.3
22.7
18.2
13.6
9.1
4.6
2,000cc to 3,000cc
41.7
33.3
25.0
16.7
8.3
Abolished
Above 3,000cc
41.7
33.3
25.0
16.7
8.3
Below 2,000cc
45.5
40.9
36.4
31.8
27.3
22.7
18.2
13.6
9.1
4.6
2,000cc to 3,000cc
41.7
33.3
25.0
16.7
8.3
Abolished
Above 3,000cc
35.0
20.0
5.0
5.0
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 .
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