The government has reiterated that that there is no plan to reduce the excise duty of imported and locally-manufactured cars, currently estimated at about RM7 billion a year.

Doing so will have a significant impact on revenue obtained from excise duty, and will also harm the overall growth of the domestic automotive industry, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said in Parliament last week.

According to reports, Mustapa said the government will draw up a comprehensive strategy encompassing a roadmap to oversee reduction in car prices in stages and establish a National Automotive Council, approved by the Economic Council, to closely monitor NAP implementation.

“The government is aware that the domestic automotive industry has to be developed further to become more competitive and offer more benefits to the people, particularly in selling cars at a reasonable price,” Mustapa said, assuring that the policy and the NAP review will not be done in haste but in stages, after careful study and consideration.

He added that the government had unveiled several important initiatives under the NAP – these include the introduction of many car models in the same segment and the issuance of new manufacturing licences for all segments of vehicles in the energy-efficient vehicles (EEV) category.

There are however no plans to introduce cash rebates as an incentive for people to purchase hybrid or EEVs, as it would involve a lot of funds, Mustapa stated.

“Currently, to attract consumers, the government has lifted the import duties for EEV while major car companies were given incentives if they set up their manufacturing operations locally,” he said.

He added that although the government did not intend to reduce the excise duty structure, several local car manufacturers, through consultations with the government, have begun working towards lower car prices, of which the Ministry of International Trade and Industry (MITI) already says is among the lowest in Asean in terms of total cost of vehicle ownership.

“Several companies have already offered incentives, while some are expected to make announcements on incentives to ensure that the people enjoy lower car prices,” he said.

For example, Perodua What’s up Graduate Progamme has introduced a low monthly instalment scheme, a 50% discount on maintenance cost for two years as well as thrown in an insurance incentive and free driving licence, he said.