Proton complains of dumping

Proton complains of dumping

Agence France-Presse, Kuala Lumpur

Malaysian national carmaker Proton has complained that foreign cars are being "dumped" in the domestic market at below their true value, amid a slump in national car sales, a report said on Wednesday.

Proton's chief executive Mahaleel Ariff was quoted by the Bernama news agency as saying that such "product dumping will affect the market."

He did not elaborate on his remarks but the Proton Edgar Dealers' Association (PEDA), which groups national car dealers, said some imported cars were being sold in Malaysia at 20-50 percent below their true value.

PEDA president Wan Ahmad Sepwan Wan Abdul Rahman told Bernama he had received information that the cost, insurance and transport of some Korean-made cars were under-declared in order to secure a lower price tag.

"With such a declaration, a lower tax is imposed and this enables the distributor to give discounts to customers," he said.

Deputy Prime Minister Najib Razak said over the weekend the government would give serious attention to the issue of dumping by foreign carmakers in Malaysia because it could lead to unhealthy competition.

Malaysia's top two state-backed national carmakers, Proton and Perodua, jointly control more than 70 percent of the domestic auto market.

However, they face increasing pressure from Japanese and Korean carmakers as the auto market gradually liberalizes under a regional free trade pact.

Last year, Proton's market share dropped to 44 percent from 48 percent in 2003, while Perodua's share dropped to 30 percent from 35 percent.

The government, which has been pushing national carmakers to boost their competitiveness, earlier this week said current export levels were unsatisfactory and urged them to take steps to improve sales abroad.

Deputy trade minister Ahmad Husni Mohamad Hanadzlah told parliament that Proton's exports accounted for only 6.1 percent of its total production while Perodua's accounted for only 1.7 percent.

Proton exported 10,916 units in 2004, compared with its production of 179,700 units while Perodua exported 2,180 out of 125,820 units.

Separately, total vehicle sales in February rose 20.4 percent year-on-year to 36,904 units as customers rushed to buy in anticipation of higher car prices under a new tax regime, Bernama quoted the Malaysian Automotive Association as saying.

Of the total, 61 percent or 22,419 units were national passenger cars and commercial vehicles, while the remaining 14,485 units were non-national cars, it said.

The association said the uptrend in sales was expected to continue into March, as market sentiment and consumer confidence remained strong.