Malaysia is the Second Most Expensive Place To Buy A Car
By Automology October 14, 2013
A recent survey by the Malaysian daily, The New Straits Times, revealed what most locals already knew – Malaysians are paying up to double for cars compared to Americans. The daily paper pointed out that vehicles like the Honda Civic 1.8MT and Mercedes C250 costs half the price in the US.
Online car portal, Jalopnik, placed Malaysia as the second most expensive place to buy a car. The first was Singapore. For once, Malaysians are happy that they do not outrank their rival neighbour.
However, the Malaysia Automotive Institute (MAI) has pooh-poohed Jalopnik’s ranking as being inaccurate, as comparison was made using a single car model, the Scion FRS. MAI’s CEO, Mohamad Madani Sahari, stated that Malaysia has some of the lowest priced local cars in the region.
“Even for luxurious cars such as Volkswagen Golf, Honda Accord, Toyota Camry and BMW 740Li, the models are priced higher especially in Thailand and Vietnam compared to Malaysia,” he said.
Nonetheless, on top of sporadic decrease of fuel subsidies, Malaysians are getting increasingly disgruntled. Banks have to offer loan terms up to 9 years so that car buyers can afford the cars. According to Maybank Investment Bank Research, vehicle loans make up the second highest household debt in the country.
The augmented prices are due to the high taxes intended to protect local carmakers, a policy implemented a long time ago to help nurture the then fledgling national automaker, Proton. Group Chief Economist of Ratings Agency Malaysia Berhad, Dr Yeah Kim Leng, said that such sheltering should cease, as the domestic market is too small and there is no economy of scale.
Top Gear Malaysia’s Editor, Hezeri Samsuri, however, defends the government and diverts some of the blame to the car sellers instead. He said that some autosellers take advantage of the public perception that the expensive car prices are due to taxes and protectionist policies for Proton.
Earlier this year, in May, Prime Minister Dato’ Seri Najib Razak, announced a plan to reduce car prices by 20 to 30%, in his party’s manifesto. However, this was during the period before and after the country’s General Election. Malaysians will just have to hold their breaths to see if this is just an empty promise to gain votes or if the government is serious about fulfilling its promise.