The Malaysian Automotive Association Welcomes Move to Reduce Import Duty on Cars

The Malaysian Automotive Association (MAA) welcomed the move to reduce the import duty on cars from Japan and Australia, saying it was in line with the Government's aim to reduce the price of cars.

Its president, Datuk Aishah Ahmad, said, however, that the move would not have a major impact on the country's automotive industry as most Japanese cars were imported into Malaysia through Thailand.

"At the moment, cars imported from Asean countries, including Thailand, are not subjected to import duty.

"This tax reduction only applies to the fully-imported cars from the two countries, which are usually luxury cars," she said when contacted.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed announced yesterday that the import duty on cars from Japan and Australia would be gradually reduced from the current 30% to 0% by 2016.

He said the import duties would be reduced to 15% in 2013, 10% in 2014 and 5% in 2015.

There are three types of duties on cars: the import duty, the excise duty, which is between 60% and 105%, and the sales tax, which is 10%.

Aishah said the impact of the decision would be minimal as the bulk of imported cars came into the country through Thailand.

"However, it is a good start towards making foreign cars more affordable to the public," she said.

She said buyers of vehicles such as the higher-end Mazda cars were likely to see a reduction in import duty.

The tax on popular models such as Toyota Vios, Honda Civic and Nissan Sylphy will not be affected as they are either assembled locally or in other South-East Asian countries.

An industry source agreed that the move was unlikely to impact the sale of these cars as the level of import duties imposed on the vehicles was not as high as excise duties.

"It may, however, change the landscape of vehicle choices for the buyer as the variety of vehicle types open to them may now be more affordable.

"A premium MPV or SUV imported from Japan may now be within easier reach than a similar vehicle imported from Korea or Thailand that are currently growing in popularity," said the industry insider who did not want to be named.