IDEAS: Malaysia should be clear about its automotive policy

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KUALA LUMPUR (July 31): The Malaysian government should be clear about its plans for the nation's automotive policy in order to develop a competitive domestic car industry, according to the Institute for Democracy and Economic Affairs (IDEAS).

In a statement today, IDEAS economist Adli Amirullah said Malaysia should be open to trade and look to competition, rather than direct government support to develop a competitive domestic car industry.

“The government should be clear about its plans for automotive policy. Technical standards on imports to ensure passenger safety are welcome but other barriers to trade, including taxes and duties designed to protect Malaysia’s domestic industry, should be avoided.

“The government needs to have a clear mind on which direction that they are planning to go," Adli said. He said the future of the country's automotive policy remains uncertain. 

IDEAS issued the statement in response to Prime Minister Tun Dr Mahathir Mohamad’s recent statement on Malaysia's plan to curb car imports and introduce a new national car.

Adli said: “There are still many ways to ensure the current local automotive industry remains competitive, without setting up a new market player. One of the ways is to reduce excise duties on imported cars to reduce prices and motivate local car manufacturers to produce better quality products.”