On Monday, prime minister Tun Dr Mahathir Mohamad said the government is reviewing the National Automotive Policy (NAP), and that it could impose new conditions on the importation of foreign vehicles as a means to prioritise local brands. Obviously, this has attracted a lot of commenters, with the latest being former prime minister Datuk Seri Najib Tun Razak.
In a post on his official Facebook page, Najib said Malaysia is a signatory to various free trade agreements and that encouraging protectionism will trigger a response from other countries that leads to higher prices for Malaysians as well as less competitive exports.
“It is an irony when the rakyat voted on the promise of lower petrol prices and abolished tolls do not get it but will be ‘rewarded’ with higher car prices,” read the post. “When I was elected was prime minister, high car prices and the protection of Proton were among the main complaints and burdens of the rakyat,” it continued.
Focusing on the issue of car prices first, Najib said that during his administration, there was never once he had suggested a policy to raise car prices. “I know that high car prices are a burden to the rakyat, especially for lower- and middle-income groups. Those who are rich can afford to purchase cars with cash but lower- and middle-income groups need to obtain a loan,” he said.
As an example, a car sold at RM20,000 will be more expensive due to various taxes and policies, resulting in buyers having to take a nine-year loan at an interest rate of 4%, paying RM28,000 by the end of their loan term. The higher prices, coupled to maintenance and yearly insurance costs add to the buyer’s burden.
“I’m of the view that this situation faced by the rakyat as unfair because the rakyat have the right to lower car prices equipped with modern features, including safety. In the past, this was also the stance of Pakatan that promised to reduce car prices but today, after obtaining power, they’ve forgotten,” said Najib.
He goes on to explain how his government aimed to right the legacy problems, including removing the 10% import tax for cars coming from Japan and introducing the Energy Efficient Vehicle (EEV) incentive. The distribution of franchise approved permits (AP) to middlemen, a practice of the previous Tun Dr Mahathir administration, was also ended, and are now given directly to vehicle assemblers and distributors. Efforts to restrict selling prices also ensured no seller could make exorbitant profits.
Bringing the goods and services tax (GST) into the discussion, Najib said the GST had a role in reducing car prices when it was introduced, where car prices with 6% GST were lower compared to prices with the previous (but soon to return) 10% sales and services tax (SST).
The result of these efforts, Najib claims, is lower car prices during his administration compared to 20 years ago. Along with the increase in wages, lower car prices also allowed the rakyat to a wider array of choices. He says this is illustrated on the roads today where there are a variety of cars seen compared to in the past where only Protons and Peroduas dominated the streets.
Najib did admit that Barisan Nasional’s pledge to reduce car prices by 30%, as part of its 13th general election manifesto, did not cover all kinds of cars. “There are those in my government that voiced their concern that lowering car prices too quickly would add pressure on banks, used car dealers and the value of household assets; a few model prices were down 30%. As a whole, car prices were reduced at different levels,” he said, adding that several public transport projects were initiated at the time too.
On the issue of Proton, Najib refuted claims that he was not supportive of the national carmaker. “I must state that my government provided a RM1.1 billion R&D grant and RM1.5 billion soft loan to Proton, even then only when they proved they had a sustainability plan that was feasible,” said Najib.
“When I was elected prime minister and before my relationship with Tun Mahathir became tense, the government provided support to Dr Mahathir for his electric car project. From a request made by Dr Mahathir, a RM270 million grant was given to Proton in 2010 to establish a joint venture with a company in the United Kingdom (Frazer-Nash Research) owned by his friend, Kamal Siddiqi, to develop electric cars and lorries,” he recalled.
“However, the investment failed and the government decided not to provide any more grants. This had made Dr Mahathir angry,” he continued.
In his post, Najib said he was still supportive of Proton but is of the opinion that the rakyat should not have to bear Proton’s problems and the company must compete on its own capabilities like Perodua. “If Perodua can become a top car brand in this country, there’s no excuse for Proton not to reach a similar position,” he stated.
“The latest reports that Malaysia could resort to policies of the 1980s and 1990s is worrying. I urge the new government to make the necessary considerations because implanting (these policies) will surely burden the rakyat, yet again,” Najib added.
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AI-generated Summary ✨
Comments reflect a range of opinions on car prices, government policies, and political leadership, with many upset about the rise in vehicle costs following the reintroduction of SST, believing prices will skyrocket and benefiting the rich while disadvantaging the poor. Some criticize Najib and previous governments for mismanagement, corruption, and not fulfilling promises like reducing car prices by 30%. Others compare current and past vehicle specs and prices, noting some improvements but overall frustration with inflation. There’s skepticism about the effectiveness of government spending, accusations of political motives behind supporting Proton, and concern over rising costs impacting everyday Malaysians. While some praise certain infrastructural developments under Najib, the majority feel that recent policies and leadership have not delivered on promises and have worsened economic burdens for the rakyat.