KUALA LUMPUR, Sept 22 (Reuters) - Malaysia's top carmaker, state-run Perusahaan Otomobil Nasional Bhd (Proton), said it has no plan to cut prices when the country lifts tariff barriers in 2005, the Edge weekly reported on Sunday.
Proton's Chief Executive Mahaleel Tengku Ariff told the Edge in an interview there was no reasons for Malaysians to wait until 2005 to buy the Waja model, which was first introduced in 2000 and currently priced at 58,000 ringgit ($15,263) per unit.
Malaysia, one of the region's largest auto markets, slaps duties as high as 300 percent on imports. Malaysia's 23 million people are the third-biggest buyers of passenger cars in Asia-Pacific behind Japan and Korea, according to the Malaysian Automotive Association.
"(Come 2005), why should I make it cheaper, tell me. Why should the price come down? The Waja could have been priced at 86,000 ringgit ($22,631) and we wouldn't have had a problem selling that car," he said.
"The key is not the price, the key is the brand," the report quoted him as saying.
Malaysia has managed to delay the lifting of barriers to its auto sector to other countries in the region, which is taking place under the ASEAN Free Trade Area (AFTA) agreement, and continues to protect its car makers from liberalisation.
Malaysia held back the liberalisation by two years saying it needed more time to prepare Proton for competition.
Under AFTA, six of the Association of South East Asian Nations (ASEAN) 10 member countries pledged to cut tariffs next year to between zero and five percent on all manufactured goods bar a tiny minority. Most of the planned reductions are already in place.
The six are Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. The four later members -- Cambodia, Laos, Myanmar and Vietnam -- intend to reduce tariffs in stages through the decade.
"We may not sell as many but we think we can probably sell about 70 percent of what we are selling now. And I will make a whopping profit. And then I'll probably get accused of profiteering from Malaysians," said Mahaleel.
"We priced it (Waja) at 58,000 ringgit, that is 20,000 ringgit cheaper. Take Waja's price -- compared with cars with the highest tax rates, it is about the same at retail price."
When asked about Proton's AFTA game plan, Mahaleel said his primary plan was "to satisfy the home market".
"And then, grow out of the home market -- that's number two." he said.
Proton said its net profit rose sharply to 289.59 million ringgit for the three months to end-June from 145.89 million previously.
Proton said car sales jumped 20.8 percent in the April-June quarter. It expects domestic car market, spurred by an improving economy, to remain positive for the rest of the financial year.
Proton was down 2.5 cents at 8.75 ringgit on Friday.