10 car models come down in price

Honda Jazz Hibrid (2.5%)

The government's move to reduce the price of the car in stages in response to undertakings in the General Election of the 13th began to bear fruit when the 10 car models showed a decrease.

For the period January to May this year, some models of car brand Peugeot, Proton, Toyota, Volkswagen and Honda have seen their prices decline for the first phase.

Positive early indicator clearly shows the government lowered car prices by 20 to 30 percent in stages until 2017 is not an empty promise as alleged by some quarters.

Ten models have lowered the price tag on the market so far is the Peugeot 308 (11 percent), Volkswagen Golf (7.1%), Viva (5.4%), Myvi (4%), Persona (3.8%), Alza (3.4%), Preve (3%), Honda Jazz Hybrid (2.5%), Saga (1.1%) and Exora (0.7%).

The price reduction plans implemented by providing a gradual reduction of excise duty on car manufacturers are using more local components.

Chief Executive Officer, Malaysia Automotive Institute (MAI), Mohamad Madani Sahari said, it is way better than giving a lump sum reduction of excise duty or are skyrocketing.

He said, even though the excise duty is now in level around 65 to 105 per cent, but in reality, the amount of excise duty paid by domestic vehicle manufacturers installation (CKD) is only about 40 to 50 percent.

He said producers CKD has made value-added activities and their local components are eligible for duty reduction.

"For the vehicle, fully imported (CBU) from countries that have FTAs ​​with Malaysia, the import duty has also been reduced.

"For example CBU from ASEAN countries already enjoy duty free import incentives from 2010 again, while CBU from Japan and Australia also enjoy the same incentives gradually until 2016," he told Utusan Malaysia.

Madani said the other reduction methods planned by the government is through liberalization of the local automotive industry and market pressure method.

"From time to time, vehicle manufacturers, vendors along with the government will make an initiative to strengthen the competitiveness of the automotive sector to help reduce operating costs, thus affecting the final price of the product," he said.

He said the decline in the price of cars in the country has done but people felt less because they expect a drastic decrease and may consider local car prices can be equal to the price in Thailand.

He said the government has explained that the price reduction car scheduled to be made in the next five years as it has to protect the fate of the people who have owned a car.

"This is important, too high decrease the negative impact on the price of vehicles, the car still owe the bank, used car industry, banking institutions and other parties directly involved.

"The drop drastically even to the detriment of all people, particularly members of the public who have had their vehicles and get a great blow for the price of their vehicles will suffer severe price declines.

"For consumers who still owe the bank, of course, their debt will exceed the value of the car due to the current market depreciation. Situation is not good for our economy," he said.

Asked, what are the factors that cause people do not feel the car price reduction, he explained every vehicle manufacturer has a separate marketing strategy.

"Initially, most manufacturers make drop through rebates and promotions but some manufacturers have reduced the price of the car absolutely.

"The price of the car and the decrease is the responsibility of the vehicle manufacturer," he said, describing the government's role is to formulate policies that give good returns to all parties.