KL to slash import duties on Southeast Asian cars

KL to slash import duties on Southeast Asian cars

Associated Press, Kuala Lumpur

The Malaysian government will cut tariffs on imported cars
from Southeast Asian countries beginning in 2003, the trade
minister was quoting as saying Monday.

Rafidah Aziz told reporters that automobile import duties
would eventually fall to 20 percent by 2005 from current levels
between 42 percent and 300 percent, the national news agency
Bernama reported.

The tariffs were supposed to be slashed by 2003 under a free-
trade pact among members of the Association of Southeast Asian
Nations, but Malaysia negotiated a two-year extension to let
local automakers prepare for stiffer competition.

However, the government will impose excise duties on both
imported and Malaysian vehicles starting next year, the minister
said. Fully assembled imported cars are currently exempted from
duties, which are generally imposed on locally manufactured
goods.

Malaysia's government presently collects an estimated 1
billion ringgit (US$262 million) annually from import duties on
cars. They range from 42 percent to 80 percent for kits and up to
300 percent for fully assembled vehicles.

ASEAN also includes Brunei, Cambodia, Indonesia, Laos,
Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Malaysia's two national car manufacturers, Perusahaan Otomobil
Nasional, or Proton, and Perusahaan Otomobil Kedua, currently
have a combined market share of around 75 percent in Malaysia.
The government is a controlling shareholder in both companies.

The two car makers will likely face stern competition from
neighboring countries such as Thailand, a major car assembler and
exporter, when import tariffs are dismantled.