Last week, the automotive industry received confirmation from the finance ministry that there will be no increase in car prices due to a new way of reporting open market value (OMV, which excise duty is calculated from), and the 100% exemption on the increase of OTR price will be for one year until December 31, 2020.
Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad said that had the last minute change of plans not happened, it would have been bad news for the auto industry, which already faces a challenging environment. She said that the association’s members, some of whom have invested heavily in assembly operations in Malaysia, would have had to rethink their plans for our market.
“Had the new OMV been implemented, a lot of investors would have second thoughts on investing in Malaysia. Even our local car companies that have been heavily investing in CKD operations would have to think again. Maybe they will decide to bring in CBU (fully imported cars) – why do you invest so much and yet it’s not competitive. That’s how I look at it,” the head of the umbrella association for carmakers in Malaysia said.
MAA’s views has now been essentially echoed by Nikolaus Graf Lambsdorff, the German ambassador to Malaysia. Speaking to Khoo Hsu Chuang on BFM’s Morning Grille yesterday morning, he was answering questions from the perspective of German businesses, in particular German carmakers invested in Malaysia.
“German companies have invested in Malaysia to assemble cars here in view of the Malaysian market, but also in view of the ASEAN market, selling cars in neighbouring countries. Malaysia has no interest in damaging this idea or to make it more complicated. It does not only affect German carmakers but several much bigger Japanese carmakers, Korean carmakers as well,” Lambsdorff said bluntly.
To the question of Thailand and Indonesia being bigger markets and potential destinations for further investment should there be policy uncertainty in Malaysia, the ambassador doubled down.
“So far things have gone quite well for the German carmakers and as far as I know, for the other carmakers as well. But if the government would raise prices for domestic production of automobiles in Malaysia, I think it would be a mistake, and of course it would make life for the carmakers a lot harder. They would lose their competitiveness here in Malaysia, but possibly also in neighbouring markets,” he said.
Lambsdorff said that German companies would usually “fix their problems themselves” and will only engage the embassy “when they really have a problem and need political help, which hardly ever happens in Malaysia.”
“I know from talking to them that they have been in serious discussions, certainly with MIDA (Malaysian Investment Development Authority) and MITI (Ministry of International Trade and Industry) over the past three weeks, and as I said, the idea has now been postponed and there will be more studies – the government has decided to take some time,” he added.
The German brands that have assembly facilities in Malaysia are Mercedes-Benz, BMW and Volkswagen. The latter produces cars for domestic sales only, while the two premium makes export a small proportion of output to ASEAN countries, even left-hand drive markets such as the Philippines (G30 BMW 5 Series, W205 Mercedes C-Class). BMW, which also has an engine assembly plant in Kulim, sends some MINIs to Thailand as well.
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The whole government was a mistake.
mistake by blind voter?
PH or BN comprise the same majority. They don’t have the brains to run a car company nor the country.
Makes no difference. It is who makes up the majority of a party that matters. Here, both also lingkup
Yah very the big mistake. They should lower ckd car price 50% and cbu car 100% then no mistake.
Same abang2 running the show. You cannot expect much.
This is why we need more Mainland brains into Malaysia.
Fully agree. Can we trade in LGE & LKS as the first ones to replace with Mainlands?
LGE & LKS are good ministers.
LKS is not a minister. Lu tak tau apa, tak payah komen la. Pi mkn meehoon cukup
I think we should start by abolishing affirmative policy. That is most important.
Even Germans have to tell pakatan what to do. Pakatan ministers all pemakan dedak until the brain only filled with dedak.
YOU SPEAK THE TRUTH!!!
Malaysia is already one of the most expensive countries in the world in terms of car pricing, and yet the economy isn’t as strong as the car prices.
Increasing car prices for CKD and CBU is adding insult to an already broken car pricing market. Don’t give me the response to get a proton or perodua, different people have different tastes, and I am aware of what I can afford but I definitely don’t want to pay Honda Jazz for the price of Audi Q3.
If Malaysia is like Tokyo or Singapore where cars are not needed to commute because of great public transportation, then fine lah, rakyat can live with it because cars will not be a necessity. Unfortunately we don’t have that and we are forced to have cars and maintain it and the only good thing about that is the cheap fuel price. But to me that isn’t enough because you still need a car to live and commute unless you live in KL or really strategic places, which is really unlikely.
Automotive industry is doomed in Malaysia, honestly, what’s the point of investing in Malaysia. Take a look at Thailand, many company investing on Hybrid and EV in Thailand because they don’t get impeded by tariffs and fees.
The government is not looking seriously into road deaths. The high taxation only permits ordinary Malaysians to buy lower quality cars that cost double compared to most of the other countries.
The government that saves lifes will get the public support.
Dear Tun,
Have u heard this?!.. even a foreigner can tell u that your policy isn’t welcome at all. Don’t blame Rakyat stop supporting PH.
Jaguh kampung and bodoh sombong people from Bolehland don’t listen to those who don’t agree with them. In fact they will ask them to get out of Malaysia if they don’t agree or please don’t interfere……
Manifesto said car prices will go down but as usual they opt for U turn.
Do not want to “jump-the-gun” as yet, but isn’t EU, China and India going “gun-busters” on EV, the NEWER technology.
The government is not looking seriously into road deaths. The high taxation only permits ordinary Malaysians to buy lower quality cars that cost double compared to most of the other countries.
The government that saves lifes will get the public support.