Pricing, Quality Hinder Malaysian Automakers

A senior cabinet minister says Malaysian automakers need to price their cars more competitively and improve their quality if they want to increase sales overseas.

International Trade and Industry Minister Mustapha Mohamed makes the comment in the Malaysian Parliament when asked if manufacturers could use the open-market Association of Southeast Asian Nations Economic Community launching at the end of the year to boost sales.

“To be honest, we have not fully succeeded in the vehicle industry in terms of ASEAN trade,” Mustapha is quoted as saying by The Star newspaper. “If the pricing is competitive and the quality is good, people will buy. We cannot force people to buy our cars,”

Mustapha says only 20,000 Malaysian-built cars were sold to ASEAN members last year and 7,000 were Mazdas.

Most were sold to Thailand, with a small amount of Perodua cars sold to Indonesia and other ASEAN members.

“Malaysia manufactured 650,000 cars, while Thailand manufactured 2 million cars and sold half of them overseas,” Mustapha says. “This is because unlike Malaysia, Thailand has an open policy where incentives and ownership is given to the companies, and there is no limit to ownership.”

He says another factor is non-tariff barriers, which mean ASEAN countries can freely sell their cars in all member countries without being assessed import duty; they only pay the goods and service tax and excise duty.