Revised NAP likely to include policy to reduce car prices over next 3-4 years
PETALING
JAYA: The revised National Automotive Policy (NAP) will include a
policy that will address the gradual reduction of car prices in the
country, said an industry source.
“The Government, through the
Malaysia Automotive Institute (MAI), had engaged us in the past few
months to discuss on the matter,” he told StarBiz.
“There
will be a policy that will tackle the gradual reduction of car prices in
Malaysia. Details of this policy are expected to be made public in the
near future,” he added.
The source said the policy would outline a structure to gradually reduce car prices over the next three to four years.
What happens to second-hand cars?
Naza Group of Companies joint executive chairman SM Nasarudin SM
Nasimuddin was quoted in a recent report as saying: if prices dropped,
the resale value of a car would then plummet but the loan amount owed to
banks (on cars already bought) would be unchanged.
The
Government has been considering it (the reduction of car prices) in the
revised NAP and it was only a matter of time for this issue to be
addressed,” said the industry source.
It is a known fact that the prices of cars are high in Malaysia compared with Thailand.
However,
it has been argued that the cost of vehicle ownership in Malaysia is
still among the most competitive in the Asean region, primarily due to
the subsidised fuel prices, cheaper road tax and insurance premiums.
In a recent news report, MAI chief executive officer Madani Sahari was quoted as saying that Malaysia had the second lowest cost of vehicle ownership in the region after the Philippines.
According
to him, the cost of vehicle ownership in Malaysia, compared to Thailand
and Indonesia, was lower by 39% and 12% respectively.
In terms
of petrol prices, Thailand was the highest, followed by Singapore,
Indonesia, Vietnam and the Philippines, Madani said in the news report.
Meanwhile,
on the point of car prices being slashed overnight via the reduction of
vehicle excise duties, industry observers argue that the impact would
be negative for existing buyers rather than first-time ones.
“If
you're a first-time buyer, it would be like a dream come true as it
means you can now afford to buy a car that was too expensive
previously,” said one industry observer who requested anonymity.
“For the existing buyer, it would mean that the resale value of the car would have diminished overnight,” he added.
It is also argued that the sudden drop in vehicle prices would have a severe impact on second-hand car dealers.
Those servicing existing car loans will also be severely affected.
In a local news report recently, Naza Group of Companies joint executive chairman SM Nasarudin SM Nasimuddin was quoted as saying that if taxes were scrapped, consumers would have to overpay bank loans taken for their vehicles.
In
the report, Nasarudin claimed that if prices dropped, the resale value
of a car would then plummet but the loan amount owed to banks would be
unchanged..
Source- the Star Online
