Malaysia To Consider Reducing Duties For CBU Hybrid Cars

TOKYO, July 11 (Bernama) -- While hybrid cars could become an alternative to dealing with the increasing high cost of fuel in Malaysia, their high import/excise duty of up to 260 percent will make them "very luxurious" cars, says International Trade and Industry Minister, Tan Sri Muhyiddin Yassin.

He said hybrid cars could be sold in Malaysia provided the import duties are lower as that would make them cheaper.

"I would inform the Cabinet as we have to look into reducing the import/excise duty," he told Bernama and Business Times on the last day of his trade and investment mission to Japan here.

During the six-day mission, Muhyiddin had met the top management of Toyota and Honda, among others, to discuss on possible collaboration in developing hybrid cars in Malaysia.

Muhyiddin said he was informed by the management that it was much more economical to bring in completely build up (CBU) hybrid cars to Malaysia than assemble or manufacture them in Malaysia.

"It is much more economical to them as they are doing the research and development (R&D) in Japan. Furthermore, the logistic cost for hybrid parts and components are much more expensive," he explained.

Muhyiddin said that Japanese automotive players considered the Malaysian market for hybrid cars as "still small" and duty structures under the National Automotive Policy (NAP) as "not certain."

"For the moment, they may come in (selling cars) in gradual manner, looking at 10 percent growth per annum," he said.

"They are not very serious at the moment until we come up with something very attractive," he said.

On the same note, Muhyiddin said his ministry would consider reviewing the NAP to further liberalise the local automotive industry..

It would include allowing majority foreign ownership in national car manufacturer, Proton, in order to gain technology, capital and market.

"This is something that we have to look at," he said, adding that Proton may not be able to sustain its position although it has been selling its cars in some countries.

"It is still in small quantum," he explained.

"We are not yet at that level in terms of competitiveness. A lot more needs to be done," he added.

On whether Proton is ready for further liberalisation, Muhyiddin said that perhaps a timeframe would be given for a progressive liberalisation.

"We want to bring Proton forward, to make it more market oriented and on par with the international level.

"He said many automotive companies in the developed countries were no longer owned by the original countries like in the United States and Italy, but the brand names have been retained.

"It is difficult for interested foreign parties to enter our market. We have lost billions because the investments have gone to other countries. The current policies are not proactive," he said.

Muhyiddin said Proton needed to accept the fact that it cannot be protected forever under the NAP.

There is interest to venture into the local automotive market but the foreign investors consider the NAP as restrictive and are unsure if they will be able to expand their business in Malaysia.

Sumber: BERNAMA