Lower Prices to Aid Malaysia Auto Makers, BMW Exec Says

Malaysian auto makers should not worry if the government gradually reduces car prices as it promised during its successful election campaign, the head of BMW Group Malaysia says.

CEO Gerhard Pils says lower car prices will create healthy competition in the local industry.

“They (Proton and Perodua) must start thinking of how to make local cars better and more competitive with international car manufacturers like Honda, Mazda and Mercedes- Benz,” Pils tells the Bernama government news agency.

Pils says the Malaysian auto makers not only could develop new high technology but also improve existing technologies for a brighter future in the industry.

“They can adopt high technology, which their competitors have, and they can upgrade their weaknesses by looking at the high technology,” he says.

Bernama says International Trade and Industry Minister Mustapa Mohamed recently confirmed his ministry will establish a program to gradually lower car prices.

Pils endorses the government’s price-rollback plan, saying it will benefit Proton and Perodua by motivating them to create sophisticated, attractive products. He also stresses the importance of lowering prices gradually.

“If the government reduces car prices on the spot as the opposition would like to do, it brings good news to the buyers, but not for car makers and distributors like us,” he tells Bernama.

“When it is done gradually, stage-by-stage, it will give us some time to investigate the new retail price for cars that suits the cost of raw materials, operational, manufacturing and related costs.”

Pils predicts the local automotive industry will become more active once car prices have been lowered.

He also says BMW aims to increase its Malaysian sales 10% this year from the 7,000 units sold in 2012. The 2,441 deliveries year-to-date were up 5% compared with year-ago.