Volkswagen AG has put a hold on it’s plans to introduce Volkswagen cars here through official channels in the Malaysian market. Back in February 2006, Volkswagen said it planned to introduce a total of 9 models here in Malaysia, beginning with low-end models like the Volkswagen Fox and the Volkswagen Polo. Down the pipeline will be more premium models like the Volkswagen New Beetle, the Volkswagen Golf GTI, the Volkswagen Jetta, the Volkswagen Passat and the Volkswagen Sharan MPV. These models are CBU models.

The new National Automotive Policy reduces import duties (from 15% to 5%) for CBU vehicles which come from countries in the ASEAN region. This means competing manufacturers like Toyota, General Motors Corp (we get Chevrolet-badged Daewoos), Isuzu Motors Ltd and Mitsubishi Motors will be able to offer more competitive prices for their CBU vehicles which come from ASEAN countries like Thailand.

This will make the models that Volkswagen originally planned to bring in uncompetitive, effectively killing them even before they start to be sold here. Volkswagen still has plans to assemble cars in Malaysia, as well as make Malaysia one of its regional hubs but there has to be some change in plans on how to achieve those targets. It recently launched its Malaysian headquarters in Wisma UOA Damansara and has invested RM42 million ringgit in Malaysia so far. It has also appointed AutoStadt Asia Sdn Bhd as the sole importer of Volkswagen cars in the country, is in discussions with Cycle and Carriage Bintang on distributorship, and has started talking to potential CKD assemblers.