Cheaper imported cars in the horizon?

Prices of all imported cars from Japan and Australia will be decreased in stages as import duties for those countries is being phased out to zero by 2016.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed said that the liberalisation of the automotive which was agreed upon through the Free Trade Agreement (FTA) with both countries.

Currently, cars imported from Japan will go through an import duty of 15 per cent while those from Australia will go through an import duty of 13.6 per cent, the minister said.

He said that the standard import duty rate for imported cars at the moment is being fixed at 30 per cent while excise duty is fixed between 70-105 per cent.

He explained that the free trade agreement (FTA) talks are among the steps taken by the government to decrease the price of imported cars through the abolishing of import duty.

Meanwhile, Mustapa said that car prices have begun to by as much as RM17,000 since fourth quarter of 2012. This was partly due to the rebates given by the car producers themselves, he added.

Mustapa said that aside from abolishing import duty, the cost for the supply of components and manufacturing of vehicles will also go down. Through these, the price of cars will simultaneously be slashed.

He said that the liberalisation of the automative industry in Malaysia in stages will encourage new and existing manufacturers and turn Malaysia into a production hub in this region, especially for fuel efficient cars.

Asked if the government has plans to reduce excise duty, Mustapa said that discussions on that have been smooth.

However, he stressed that whatever the decision is made will be implemented in stages.