No cheaper car price after AFTA
BUSINESS TIMES Singapore
November 8, 2002
M'sians to bid for car COEs?
Dr M moots idea for offsetting revenue fall when import tariffs are cut
By Eddie Toh
In Kuala Lumpur
MALAYSIA might implement a COE system - just like Singapore's - to help make up for the fall in revenue when tariff barriers on imported automobiles come tumbling down in two years' time under the Asean Free Trade Agreement.
Malaysian Prime Minister Mahathir Mohamad said the government will find new ways to collect revenue when import tariffs are lowered to 5 per cent in 2005.
'Certificate of fitness can be introduced,' he told reporters yesterday after launching two new models of the national car, Proton. He was asked if Malaysia will introduce Certificates of Entitlement, which entitle successful bidders to own cars in the Republic.
Dr Mahathir dashed the hopes of car buyers waiting for prices to ease when import duties are slashed. 'Sorry, some people are waiting for the price to go down but it's not going to happen,' he said.
'Under Afta, we will not impose import tax that is high. But within the country, other taxes will be introduced,' he added.
He stressed that the new tax will be applied to all cars - domestically produced cars like Proton as well as imported cars.
Saturday, November 09, 2002
Government working on post-Afta measures for auto Industry
KUALA LUMPUR: The Government is still working on the guidelines and measures for the local automotive industry in preparation for the Asean Free Trade Area, said International Trade and Industry Minister Datuk Seri Rafidah Aziz.
“We are working on the measures, not necessarily tax measures but measures that need to be parallel with those of tax measures,’’ she said during her ministry’s monthly media briefing at her office here yesterday.
As for tax measures, Rafidah said, the matter had yet to be decided by the Government, adding that Malaysia had another two years to fully work on them.
Saturday, November 09, 2002
Don’t forget the consumers in post-Afta period
PETALING JAYA: The interest of consumers should not be forgotten by the Government following its decision to impose other taxes on imported cars after the implementation of the Asean Free Trade Area (Afta) in 2005.
Federation of Malaysian Consumers Associations (Fomca) legal adviser T. Indrani said while the decision was meant to protect the local automotive industry, there should also be a “balancing act” to protect Malaysians as there were no proper regulations in place for them.
“Consumer bodies are worried as globalisation and free trade are not working out to benefit the people. Talk of self-regulation resulting in cheaper prices is not seen to work out as there are ways to work around it,” she said yesterday.
Indrani also said that the Government had to ensure that the taxes it was planning to impose were not discriminatory on foreign-made cars.
“There has to be a careful study on the matter because Malaysia could be taken to task by other Asean member countries if they feel that the taxes are a protective measure for locally manufactured cars,” she added.
yells volumes for ill intentions.
why join afta, wto, etc when the ultimate spirit of these agreements, i.e. max benefit to consumers, is not on the agenda!
begs the question again - what the hell is afta, wto, globalizaiton, etc all about, if not just a license to kill for the existing global giants. eventually there will be a microsoft in every industry, thats my bet.
This is a big joke to protect the local carmakers...
AFTA my F_ _ T ......!!!!@#$#%
don't have to wait 'til 2005 to buy a car. Get the car that meet your expectation and built quality now.
2:42pm Fri Nov 8th, 2002
Car prices an act of highway robbery?
When the government launched Proton in 1985, import duties on
completely-built-up (CBU) cars were jacked up, and Prime Minister Dr
Mahathir Mohamad told us then:
"Well, we have to protect the nascent locally assembled car
industry. There're lots of spin-off effects which will be good
for everybody. So if you still like to get an imported car, then
you'll just have to pay more, I'm afraid."
Never mind that there were already a few car assemblers around - they were
in private hands - and there were no useful links between them and the
dominant political party. Malaysians had to undergo all the expense of
reinventing the wheel, because it always makes for political security and
stability to have bumiputra engaged in the economy everywhere. Fair enough.
Now that WTO and Afta are breaking down protectionist barriers to free trade
everywhere, Mahathir says:
"Local taxes are going to be imposed on all cars to replace the
loss of revenues from import tariffs so sorry-lah! The price of cars
is not going to come down."
Next, will he blandly asserts the money is needed to "finance development
and pay government servants' salaries"?
Shouldn't he be looking into greater efficiency in the public services
rather than providing easygoing employment for large numbers of potential
voters? He should be well aware by now that these government servants may
well vote his party out as there are alternative channels for the bumiputra
Previously International Trade and Industries Minister Rafidah Aziz has also
said that "just like Singapore, you know, we have to find other ways to
recover the loss of import tariffs".
Please! Singapore is a tiny island with a well-designed mass transit system
and an advanced electronic traffic management system. They have no
alternative but to tighten control of car ownership. But they provided
excellent alternatives to private car transport.
In Malaysia, we certainly have plenty of room, except in the larger urban ar
eas, for the growth of vehicular traffic in suburban areas and on intercity
and interstate routes. Cars are a necessity and the second largest family
expenditure after housing.
How can Malaysian motorists get together to deal a devastating blow,
peacefully of course, to the current government through the ballot box when
the next national elections rolls around?
In the words of the passengers of Flight 93 on that fateful day on Sept 11,
Every time your car rolls away down the driveway towards your destination,
let's imagine, just for one moment, that we're helping to roll back the
Barisan National's 45-year stranglehold on political control.
So that they'll be just a little less arrogant, a bit more careful with our
money. Let's roll!
Last edited by jeffooi; 10-11-2002 at 11:32 AM.
2:41pm Fri Nov 8th, 2002
Cars still on crutches post-Afta?
Prime Minister Dr Mahathir Mohamad has issued a statement that imported cars
will not be any cheaper because domestic taxes will still be levied on them.
Afta only requires import taxes to be removed.
But he also goes on to say that locally-made cars (such as our venerable
Proton) will be subject to the same taxes. Taken in its entirety, Mahathir's
statement leaves some questions begging to be asked.
- What's the point of putting domestic taxes on imported and local cars?
Okay, some income will be generated for the nation from the taxes, but
surely, such 'creative taxation' policies goes against the spirit of Afta,
if not the latter?
- If our national cars are going to be equally taxed (there is some doubt in
this; at the last moment, I suspect special 'tax breaks' may be awarded to
continue the protection the national cars enjoy), how will they remain
competitive? The only reason why local cars are cheaper OTR (on-the-road) is
because import taxes double (and at times, triple) the retail price of an
Will the "domestic taxes" proposed be higher for "imported" cars? Or will
the domestic tax be equal for all cars? If this is true, then "imported"
cars of the same class will still be cheaper than our Proton and Perodua;
foreign car makers have economics of scale on their side and can afford to
enter a loss-leader strategy to attract the Malaysian consumer.
Under such circumstances, Proton and Perodua's market share will be severely
eroded even if they are able to lower their costs of production and the
retail price of their products.
If this happens, and they both begin losing money, will the rakyat
(citizens) be called upon to bail them out? Encore, MAS; encore, Perwaja
STRAITS TIMES Singapore
9 November 2002
Malaysians may dump Protons for popular foreign cars
Already, many people are putting off car purchases in anticipation of cheaper foreign cars entering the market in 2005
By Leslie Lau
MALAYSIANS are still expected to eventually trade in their Protons for foreign cars despite an announcement this week that cheap foreign makes will not flood the market in 2005.
Most Malaysians have put off car purchases in anticipation of cheaper foreign cars entering the market in 2005, the year the government would be compelled to lower excessive protectionist taxes under its commitment to the Asean Free Trade Area (Afta) agreement.
But Prime Minister Mahathir Mohamad said this week that taxes would be maintained equally for both foreign and local national car companies like Proton and Perodua.
This would effectively result in national cars becoming more expensive by 2005.
...Under Afta, Malaysia cannot impose excessive taxes on foreign cars manufactured in Asean countries as part of its efforts to protect the local car industry.
Levying similar taxes on national and foreign cars by 2005 will result in Protons costing more while foreign makes may cost slightly less than now, a motoring industry analyst told The Straits Times.
He said the pent up demand among the Malaysian motoring public, nearly 60 per cent of whom drive a Proton model, will likely result in national cars losing substantial market share.
Some are even predicting dire straits ahead for Proton, Malaysia's first national car that was started in 1985 and now sells two out of every three cars in the country.
...Proton this week launched its latest model, the Arena, which is a cross between a pick-up and a saloon, a variant seen only in Australia in vehicles manufactured by Ford and General Motors, and which has received less than enthusiastic comments from the public so far.
Proton's last model, the Juara, a boxy mini city van, failed to sell well, putting pressure on company executives who have promised the government that Proton will be competitive by 2005.
It also launched a new edition this week of its Waja saloon, a model the company hopes will enable it to compete with foreign makes by 2005.
Malaysia's other national car company, Perodua, which makes mini cars like the Kancil and Kelisa, is expected to emerge unscathed in the aftermath of Afta.
Industry analysts say Perodua, which is in partnership with Daihatsu of Japan, has no rivals in selling its popular mini-cars in Asean countries.
The company will also be manufacturing Daihatsu cars for the Asean market.
1:40pm Sat Nov 9th, 2002
Consumer group: Ensure domestic tax on cars not discriminatory
A local consumer advocate group, Era Konsumer today urged the government to
be cautious with its implementation of the proposed domestic tax on cars
when the Asean Free Trade Agreement (Afta) kicks in next year to avoid being
misconstrued as discriminatory to imported cars.
...Charles Santiago, an economist specialising in globalisation issues,
explained that a free trade regime means there should be a unified trade
practice among its member countries and warned that the proposed domestic
tax could violate the practice.
Import duty and sales tax imposed on imported cars using petroleum under the
Malaysian Customs Duties Order 1996. [Duty is calculated based on the
Capacity Import duty Sales tax
Not exceeding 1,000 cc 140% 10%
Exceeding 1,000 cc but not exceeding 1,500 cc 140% 10%
Exceeding 1,500 cc but not exceeding 1,800 cc 140% 10%
Exceeding 1,800 cc but not exceeding 2,000 cc 170% 10%
Exceeding 2,000 cc but not exceeding 2,500 cc 200% 10%
Exceeding 2,500 cc but not exceeding 3,000 cc 250% 10%
Exceeding 3,000 cc 300% 10%
Source: Malaysian Consumer Homepage
Response from the ASIAN/ASEAN neighbours
Monday, November 11, 2002
ASEAN must fix its own house
Beyond the fanfare of signing ceremonies, which were in abundance in the Cambodian capital of Phnom Penh during last week's ASEAN summit, the member nations seem to have lost sight of the fact that they need to get their house in order by knuckling down and meeting past and present obligations.
...Nobody really knows how long it will take to put the free trade zone into effect, but the time frame is expected to be about 10 years. China has successfully used this framework as a stepping stone to draw ASEAN in. Due to its domestic politics, Japan's future negotiations on closer economic cooperation with ASEAN will not be as easy as they are hoping for.
These difficulties also point to ASEAN's own shortcomings.
Its members have not taken the obligations under the Asian Free Trade Area (AFTA) seriously. Malaysia has already broken the AFTA rules in its automobile market. Now Indonesia and the Philippines are going to do the same by withdrawing sugar from the sensitive list altogether. Such a preponderance for unilateral actions among members is rocking the long-term aims of AFTA. It will hurt ASEAN's future negotiations on broad-based trade pacts. Without a fast and fully implemented AFTA, free trade deals with outsiders would be jeopardised
when u wanna take on a giant, u gotta use the right tools. david used a simple sling and a stone to down goliath.
local car manufacturers gotta be more focused and use the right tools too. if their aim to make msians patriotic and but only msian made vehicles then they are on the right track.
but if ringgit and sens feature in their plans and free trade globalisation afta wto etc are in their lingo then it is time to take stock. not of how many cars roll off the assembly lines. but of how many active makes and models they have in hand. honestly, how big is the market and how cost efficient is it to mill such a wide variety of utility boxes. just so that every car buyer will have a local option .
nissan sold over 6k units of ad resort under very trying (trade resisting) circumstances and over the financial crisis. judging by what i see on the roads, it is the most popular station wagon in the country, and with very very few competitors. even with that posiiton, nissan has found it appropriate to discontinue the model, and of course not just to replace it with another.
do we really need wiras to fight wajas, kancils to do battle with kelisas? do we need 4 wheeled princes and boxing champions and kembaras and kenaris to sit tall on our roads? and introduce another 2 new white elephants in really bad times ?
my bet is that if the trend continues, they will need another bmf or emron's financial mavericks to live out the decade .
sigh, sigh, there goes the 2005 dream. then again, if taxes are going to be imposed on both local and imported cars, that wd mean there isn't anymore price difference (provided the taxes are on on the same level for all cars and not less tax for local cars), we can go get the imported cars instead. i have just finished my last free service, each service resulted in a new set of problems for the poor little satria that i'm just going to pay a mechanic to do a thorough one after this. if only i had opted for a kia last year, it would have saved me a lot of frustration and misery with low quality products and indifferent USPD staff who thinks i'm begging them to service my car at my own will. a toyota car owner gets to evaluate the sales and service staff and gets a reminder for servicing, a proton owner is treated like dirt at the service center, at least, the one in puchong.
I fully agreed with GeneralDogsbody's comment on the kind of service you would get from USPD's (now Proton Edar) Service Centres. My personal experiences at the ones in both Section 13 and Section 14 are equally worst. They treat customers like dirts and nuts and feel they're sort of a nuisance to them. The kind of system they adopt is the worst of its kind in the world which requires long waiting at the expense of customers' time while they work 'hard' and long hours behind their back. They expect everyone to drop their cars early in the morning at their 'good' hands and collect later in the evening. For those who wish to wait, you just have to wait at their pleasure and delights. Their 'first come first serve' policy doesn't apply at all. As regards to their 'good' hands and working 'hard', for example, I found out, at my last service, that one of the air-con nuts was not replaced (most probably forgot to do so) and paint coming-out scratches appeared near the boot and elsewhere. I wonder whether the oil and filter were really changed and replaced at all. It was a great relief to me after going through the 3 ordeals on their so-called 'free' services they proudly pledged to give you when you buy their cars. Generally, their spare parts and oil costs more compared to those outside (they even got the guts to add RM3 for EVERY service bill under 'miscellaneous' and paper charges).
Till this day, they still survive and stand tall, WHY? WHEN? HOW?
yes leetickseng but have u ever seen a mechanic who does not have an wide assortment of screws nuts and bolts not to mention other odds and ends whcih should rightfully have been installed from some where? anyway the subject seems to be diverting from car prices after afta.