Malaysia Not Rolling Back Tariffs on Imported Cars

The Malaysian government says it will not reduce the excise duty on imported cars as a way to lower vehicle prices.

Deputy International Trades and Industry Minister Hamim Samuri tells Parliament the elimination of import duties does not guarantee a reduction in the price of a car.

“Car prices are determined by several factors, including manufacturing companies and vehicle assemblers, foreign exchange rate, transportation cost, insurance and loan interest rates,” he says.

Hamim says abolishing excise duties would reduce government revenues 7 billion ringgit ($2.2 billion) annually. “The loss in revenues will limit the government's capabilities to provide basic necessity to the people,” he adds.

The government’s Bernama news agency reports Hamim had been asked in Parliament if the government would reduce duty excise rates on imported cars to meet its election promise of lowering vehicle prices 20% to 30%.

“Lowering car prices should be done in stages…so that there would be no huge impact on the domestic automotive industry,” he replies.

Although cutting prices of imported cars could change the way the local industry works, Hamim says, in the long run it would increase Malaysia's competitiveness and its ability to make more high-quality cars.

“The government will continue to support the development of the national car to remain competitive locally, regionally and globally,” he says.