Budget 2007 for the automotive industry

All of us have at least some reason to be glad with the new Budget 2007. The absurd idea of scrapping motor vehicles above 10/15 years of age was not implemented in the budget, not at least for this year. So we’re safe for another year. Let’s have a look at what the Budget 2007 brings, in relation to motorists/the automotive industry:

  • Underdeclaration of motor vehicles will be taken very seriously. If caught, a minimum compound of 5 times total tax payable to be imposed. Enforcement capacity of Customs will be increased.
  • Biodiesel fund of RM500 million to develop the bio-diesel industry.
  • RM19 billion to be allocated for fuel subsidy and tax foregone, which is higher than the previous RM16 billion figure. If next year’s oil prices remain around the US$70 per barrel range, subsidies and tax foregone should remain at current levels, which means there should be no reason for any huge petrol price increases.

We’re safe for now. The government’s decision to cut corporate tax rates from 28% to 27% for 2007 and 26% for 2008 pushed Proton share prices up by 5.3% to RM5.20.

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Paul Tan

After dabbling for years in the IT industry, Paul Tan initially began this site as a general blog covering various topics of personal interest. With an increasing number of readers paying rapt attention to the motoring stories, one thing led to another and the rest, as they say, is history.



  • volvolover (Member) on Sep 02, 2006 at 6:55 am

    What if that bitch Datuk Aishah Ahmad try to propose it again next year for Budget 2008. We must find ways to make sure our cars will never be scrapped mandatory.

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  • RCM (Member) on Sep 02, 2006 at 7:37 am

    lots of kampung people especially in east coast just cant afford to buy new cars…its normal to see very old cars that worth around rm2000~5000 on the road of kelantan & trgganu ..They want to lose-again- in kltn & trgganu in the election, then they should go on will the scrapping plan…

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  • fookeatmin1989 (Member) on Sep 02, 2006 at 7:43 am

    Sigh…the goverment shutting our mouth by giving us a huge subsidies fund…..and still forcing us to buy craps in the form of Proton……

    The goverment are really good…good..good..

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  • stanleyshyeoh (Member) on Sep 02, 2006 at 7:54 am

    Because they know you can't do s**t even if they screw you kau kau. Or your next generation, god bless. There's nothing you can do if they scrap your ride.

    I'm surprised the government aren't putting this scrapping rumour to rest by officially denouncing any intentions of ever implementating it. Another bullet for the oppositions.

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  • volvolover (Member) on Sep 02, 2006 at 8:16 am


    Accident in the UK involving a proton. Read the article and it says it’s the first fatal accident we have here. Malaysia boleh!! The first death accident in this area is a proton!! It has many accidents before at this stretch, no deaths. First time death accident here is a proton!! Does this make Malaysia proud? You decide!!

    Advice to proton: want to escape bankcruptcy? Then make better cars with better safety features, interior and better quality!!

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  • SatriaGuy (Member) on Sep 02, 2006 at 8:24 am

    Chill out volvolover.

    People die in a Volvo too you know. Sure, a volvo may have more safety gizmos than a Proton but you can't dismiss a Proton just because there is a UK report about a fatal accident in a Proton. That's just childish.

    Princess Diana was in a big, huge S-class right? And in an extreme case, so was Aryton Senna in a carbon tub F1 car.

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  • drifting4eva (Member) on Sep 02, 2006 at 11:53 am

    stanley is rite. gov't can screw us all they want and know we will still take it without protest. face it, msians are all sheep and will do whatever the gov't tells us.

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  • topgunthang (Member) on Sep 02, 2006 at 12:09 pm

    yea….people also die in tanks. but you'd have to admit if you were to crash headon between a volvo and a satria. you'd rather be in the volvo. no doubt about that.

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  • aksMs (Member) on Sep 02, 2006 at 2:21 pm

    topgunthang – "….if you were to crash headon between a volvo and a satria. you’d rather be in the volvo."

    True, true. No doubt.

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  • rexis (Member) on Sep 02, 2006 at 5:06 pm

    Dont go off topic, satria crash in UK really doesnt related to auto budget.

    Wat a relief, i can keep my Wira. Lets make sure we scrap the MAA lady boss before next year budget.

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  • rexis (Member) on Sep 02, 2006 at 5:12 pm

    Well, i realised that it is not that we want to scrap lady boss then straight can scrap.

    Nothing about how to encourage people to use biodiesel? Or anything about encouraging people to use kereta diesel?

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  • motorhead (Member) on Sep 02, 2006 at 6:26 pm

    Huh… the budget has no significant meaning (in term of bisnes), like our previous NAP… reduce 1%?? what do you expect?, Paklah punya policy very plain la, tiny2 reduction, nothing really interesting, no significant projects oso.. I am sure Tun will not be satisfied, sure will bising2 again….

    no scrap policy??.. for now la… but since the damned one has raised the idea, it may be reality someday, not bcoz it's really good for us, but bcoz it can generate more money for themlah.. they all r very greedy… make me sick..

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  • volvolover (Member) on Sep 02, 2006 at 9:03 pm

    First, which part says I owned a volvo? I never claimed that. I drove a volvo before(Sold off now) and most often I drive a proton satria.

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  • KingKong (Member) on Sep 02, 2006 at 11:30 pm

    if i ride in Kia, Tata or Hyundai, confirm will always stay alive?

    don't be naive, people can also die in BMW or MB.

    if u want to bash, please bash with relevant fact/idea.

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  • volvolover (Member) on Sep 03, 2006 at 12:25 am

    I was using relevant data. It's just that you can't accept the facts.

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  • volvolover (Member) on Sep 03, 2006 at 12:50 am

    A good article on why scrapping is done. Proton admits it. Must read!!


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  • volvolover (Member) on Sep 03, 2006 at 12:52 am

    I am not trying to make a war now. Even proton chairman says proton car is not good!! Truths are not easy to accept. How can you improve if you are always in a defensive mode?

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  • volvolover (Member) on Sep 03, 2006 at 12:57 am

    Let me tell you this, the day they approve car scrapping, you will see mass demonstration, outcry on opinions in the opinions section of newspaper, people will boycott proton, people have trouble to get to work(no car) bus will be packed(now is already packed), train and lrt system overload. People will vote less for BN and instead vote other parties like DAP and other parties. It will be a political suicide for BN. So it's not surprising the bill didn't get through. If cars is cheap, it will be easier to get through as people won't object, but cars in Malaysia is expensive. That's not all, if scrap your old saga, they still selling saga right? Then buy another same saga, wira or iswara. Proton must scrap models more than 5 years if they want to be competitive.

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  • volvolover (Member) on Sep 03, 2006 at 1:03 am

    I bring you a quote on the site I just posted.

    "Wan Ahmad Sepwan said Peda had worked with various parties including vehicle inspection outfit Puspakom on the scrapping mechanism. "

    "Based on a British model, it will allow for the scrapping of old vehicles in return for vouchers that can be used by consumers to buy new cars.

    If he wants to talk British, let me talk british then,First proton selling in brittain is cheaper than those in Malaysia and has has more specs than those in Malaysia and they are more environment friendly then Malaysia. How come more specs and still cheaper. If same specs and cheaper also bad already.

    Secondly, it costs RM6K to export as shipping costs according to Joe Ooi.

    Third, what about british import tax? And still cheaper than Malaysia.

    Fourth, Malaysian is not subdising by paying higher car prices in Malaysia for them to export. If it's not profitable to export, they won't export. So we are not subsidising. This is call taking Malaysians for a ride.

    So in short if it's cheaper in Malaysia, how much should Malaysia cars costs.

    Just say Waja, Waja price in Malaysia – RM6 K – Import TaX(as export to UK has tax) is the real price. What about extra spects? How much would that costs if same specs UK and Malaysia. Probably cheaper another 5-6K. So if that's not bring you for a ride, what do you call that?

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  • KingKong (Member) on Sep 03, 2006 at 6:23 am

    bro, nice try to change the whole root.

    u says that Proton cars killing people.

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  • volvolover (Member) on Sep 03, 2006 at 6:41 am

    but yes they are killing people. Not to say it isn't. But since you have the car already you want people to scrap just to buy a new car?

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  • oranglulu (Member) on Sep 03, 2006 at 3:30 pm

    for the uk accidents ,must remember,depends on how severe the accidents,no vehicles is safe,not just proton,their lady DIANA died inside a mercedes s280,so on this subject,we must be fair to proton,although i never like it anyway.

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  • oranglulu (Member) on Sep 03, 2006 at 8:48 pm

    on the under declare vehicles will be taking care seriously,joke lah,just look at all sarawak aps and custom declaration form,all under declare,and the vehicle are on sales in peninsular too,for example if peninsular custom tax for a vehicle is 50k,sarawak aps vehicle paying 30 over k,the custom departments has all the records to compairs,we layman dun had,so i am just RUMORS,SO,MAY THE NEW RULING,WILL GIVE OUR CUSTOM DEPT MORE authurity in cracking down this unjust! thank you 2007 budget!

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  • quest (Member) on Sep 04, 2006 at 6:51 am

    Hi All, hate to spoil the Party….. I think the scrapping thing will come true, at least partial. In many countries, govts. do have a car scrapping policy for cars above certain years.

    Either that or they have a system to inspect and certify that older cars are road-worthy annually.

    What does that mean to us? We know they probably can't force people to scrap for peanuts, but they sure can give out contracts to certain handpicked companies to certify our cars. And of course, any such things 'may' lead to abuse and 'may' become a source of future revenue for people in that co. (if you know what I mean). Another horror that can affect us "if" (more like 'when') is the history of Malaysian corporatisation of public services……

    PROFITS 1st, before real work or service. How about monopoly, oligopoly? They determine the costs, we pay. Do we have a choice? Remember LLN to TNB, J-T to Telekom, increase rates, nuts you can do about it, just pay….. and they justify it by saying HEY!! In US and Germany they pay more than us… Heck, they never compare with Laos or Papua New Guinea.

    The only question now is WHEN, not IF. I'm guessing 1.5 to 2 years after the next general election. We're scr#wed.

    I'd like to see how the P1 lovers here would react then, because P1 will be monopolistic again. They'll name their price for CRAP, they do now, but they'll be so much more powerful then.

    We're simply SCR#WED.

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  • Joe Ooi (Member) on Sep 04, 2006 at 7:02 am

    quest, I don't think scrapping policy can help P1 as there are P2 and Naza as well? There are big political implication if this policy ever get through and as what you mentioned – ABUSE……..!

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  • quest (Member) on Sep 04, 2006 at 7:22 am

    KingKong, Volvolover IS talking about the SCRAP issue (notice SCRAP is just CRAP with an S in front), but regarding his comment about rather be in a Volvo than a Proton in a crash, I think I agree with him. Since you so many times say people in Volvo, BMW and MB" also die what" with colorful examples like Princess Diana, let me highlight some stuff to you.

    Crash test records have showed OVER AND OVER again that Proton have very low ratings compared to vehicles of the same range (of course no one is comparing Protons to a high end Beemer or Mercs). Heck, we even lose out to the Koreans.

    Having said that, it doesn't mean you won't die in a crash if you're in a Beemer. It merely means that you'll have better chance of survival in a Beemer or Merc. And since you insist other cars are just as death trap as a Proton, FYI, safety ratings are not only confine to crash test, it also take into account of other safety issues. ABS is one (anyone has ABS in your Waja, Wira, Iswara, Saga, Gen2…… no? No takers??? I guess not…. none. The only Proton with a simple "incorporated all wheel" ABS is Perdana (and it works!!!) How about "weight distribution"? Beemers and Audis and Mercs (and most continental makes PLUS some Japs) make cars with pretty much 50%:50% front:back weight distribution. Weight distributed evenly car will be less likely to be outta control. In fact, they have another system for that, it's called Traction Control or TC. Less 'buang'-less accident, less accidents, less likely that it'll buang into a "not-so-many-safety-feature-Proton" to kill the occupants in the Proton. Come to think of it, does any of our Proton have that?….. NOPE again. Then come the SRS Airbag. Again, does any if our Proton have that???? (Then again, Proton lovers would justify it by saying "you can't modify the steering" if got airbag mah..)

    Heck, in terms of safety, they're also rating pedestrian safety, by studying your vision field, see if you can spot the pedestrian better with car design, see if your bonnet will absorb some impact if you knock someone and they crash on your bonnet. Does Proton have any of these features…… going going gone.

    Come on la… KingKong, nothing personal, but stop quoting about people in Volvo, BMs and Mercs 'also dying wat'. I want to be in a Beemer IF I were to have a crash, period. So would you.

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  • rexis (Member) on Sep 04, 2006 at 5:05 pm

    I agree on volvolover and quest as well, proton car, seriously, is the least safe car. Except the safty belts, what else safty feathers it has? They are barely some metal chassis on 4 wheels.

    Anyone read the star about the taxi accident in Jalan Pudu? The speeding CRV hit the iswara taxi, taxi driver dead, the couples badly injurd. CRV driver even tried to escaped the scene, but got caught by public.

    Seriously someone should take the good old saga to do a crash test to show how dangerous it is.

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  • szw (Member) on Sep 05, 2006 at 4:01 am

    … no coment …

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  • armandd (Member) on Sep 05, 2006 at 11:50 am

    studies showed that ESP installed in cars could reduce the accident rate by 50%. ESP is only 2nd after seat belt in terms of passenger safety. i read it in an english daily recently.

    most proton cars dont even have airbags or ABS, what else ESP…

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  • oranglulu (Member) on Sep 08, 2006 at 2:22 am

    19billion alocated for fuel subsidy in not enough if fuel prices at us 70 a barrel,previous 16billion apend on subsidy was base on 50 over us a barrel,presently at 1.92 for premium petrol,you want to know how much being subsidized?take a trip to thailand,say,haadyai,go to a petrol station find out,last i know,rm.3.00/liter,they do not subsidized their ppl fuel,so is the truth price,and it go up and down daily,like share market,thats why,on their sign board outside petrol station,they display price/liter clearly,so come back to malaysia,3 ringgits minus 1.92 the per liter subsidy is 1.08,if by end of this year or next year the petroluemprice wents up further?you think how many billion needed and here we are trying hard to sent more p1 somemore,so like i say b4,on 1st week of jan 2007,when our PM promises expired,the fuel price definately,unmistakenly,will go up at least 50 cents per liter.

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