By Yamin Vong
HERE’S something to cheer you up.
The Malaysian Automotive Association (MAA) last week proposed some tariff and non-tariff measures to the Ministry of International Trade and Industry to help its sector emerge from the pandemic with a minimum of retrenchments.
“But it’s too soon to expect a response,” confirmed MAA president Datuk Aishah Ahmad when we asked her on Monday.
Similarly, the dealers’ associations of Proton, Perodua, Honda, Toyota and the Federation of Motor and Credit Companies Associations of Malaysia (FMCCAM) submitted their proposals for life after the pandemic.
One of the veterans in the industry, Datuk Seri Ben Yeoh from Bermaz Bhd, the assembler of Mazda cars, was convinced that the Malaysian government would look after the strategic automotive sector once the B40 programmes had been sorted out.
“Reducing taxes won’t cost the government money. To tackle the economic sickness, we propose reduction of excise duties, and lower the gazetted Open Market Values (OMV). A 15% reduction of car prices would certainly boost demand,” Yeoh said.
“With a duty reduction, the government doesn’t have to support by giving cash. Once we can whet the appetite to buy cars, employment at car plants won’t be affected. When people have jobs, they will buy cars.
“There will be a population of cars reaching three to four years of age and people will want to change those out of warranty cars to a new model with manufacturer’s warranty,” he said.
Datuk Tony Khor, the long-time president of used car dealers under the FMCCAM, of course doesn’t like a sudden reduction of car prices because this will correspondingly diminish the stock of cars owned by his members.
“FMCCAM’s dealers have about 80,000 used cars in stock and what I would like to propose is a Buy Now Pay Later scheme,” Penang-based Khor said.
“This is what GM and Ford in the US are already doing – two to four months’ repayment holiday – on their own initiative.
“Buy Now Pay Later should be for new and used cars. Bank Negara should support the auto industry. Give some moral suasion to get the banks to relax loan criteria.
“The Malaysian automotive sector is too big to fail. Seven million cars are currently being financed and this accounts for a loan portfolio of RM300 bil a year. Additionally about RM35 bil a year of loans is created from new and used car sales.
“Banks must support, otherwise Malaysia will suffer unnecessarily,” Khor said.
On another note, Khor also criticised the high prices of new cars due to taxes, highlighting executive cars such as the Toyota Camry and the Honda Accord.
“The pricing of these executive cars are almost topping the RM200,000 level. This is bad news for Malaysian consumers. It’s exploiting car buyers. The government should reduce these taxes and make sure that the cost reductions are passed on to the consumers. These companies have invested a lot on local assembly and the government should look after them.
“A bird in the hand is worth two in the bush,” he said. – April 10, 2020
