IDEAS urges govt to refrain from direct involvement in market
KUALA LUMPUR: The government should be clear on its automotive policy and steer away from any direct involvement in the market, said IDEAS economist Adli Amirullah.
“The government should be clear about its automotive policy. Technical standards on imports to ensure passenger safety are welcome but other trade barriers, including taxes and duties designed to protect Malaysia’s domestic industry, should be avoided,” he said in a statement.
Adli also challenged the claim that Malaysia’s car industry was at an “infant” stage.
He said Proton Holdings Bhd and Perusahaan Otomobil Kedua Sdn Bhd (Perodua) had been in the market for 33 and 24 years, respectively.
“Perodua has grown so much that it now has the highest market share at 39.8 per cent for passenger vehicles. It sold a total of 204,887 units last year, which surpassed all imported cars.
“Proton came in third after Honda, with 13.8 per cent of market share for passenger vehicles, and 70,991 units sold last year. This proves that there are flaws in the ‘infant industry’ argument.
“How long should our automotive industry be considered as an infant?”
Regarding the proposal for a third national car, Adli said he welcomed new players only if the government stayed away from the market.
“In principle, we should not prevent any market player from entering the industry if they have the capacity to do so.
“But the government needs to stay away from the market and should not involve itself, directly or indirectly, in the process of setting up a third national car.”
Instead, Adli said, the government should focus on promoting competition.
“There are still many ways to ensure that the local automotive industry remains competitive without a new market player.
“One of the ways is to reduce excise duties on imported cars to reduce prices and motivate local car manufacturers to produce better products.
“The government needs to have a clear mind on which direction to go.
“Malaysia should be open to trade and competition, rather than direct government support, to develop a competitive car industry,” he said.