‘Pakatan plan to reduce car prices too simplistic’

DIRECT APPROACH: Auto companies reduce cost only after government approaches them, says Mukhriz

(ST) – DEPUTY International Trade and Industry Minister Datuk Mukhriz Mahathir has dismissed Pakatan Rakyat’s plan to reduce car prices by abolishing excise duties as “simplistic”.

He said cutting taxes alone would not bring down prices, pointing out that the cost of hybrid cars remained high despite the gradual removal of duties imposed on their sale over the past four years.

“The car companies have higher (profit) margins now since there are no taxes, but the pricing remains subject to market forces.

“Even without taxes, the cost of hybrid cars is higher here than in the United States. The (opposition’s) argument that removing excise duties alone can bring down the cost of cars is simplistic.”

Mukhriz said car prices had already begun to go down over the past two months, following the government’s own discussions with car manufacturers and companies on ways to offer better pricing for Malaysians.

“Since then, we have seen some car prices reduced by about RM2,000 per unit. One car has gone down by RM14,000 per unit.

“At the same time, we have not reduced duties imposed on the sale of cars. This is proof that we can help bring down car prices without sacrificing domestic revenue.”

He said the mechanisms involved in revising the National Automative Policy were a clear contrast to the plan put forward by Pakatan, dismissing accusations that Barisan Nasional copied the idea to reduce car prices from Pakatan’s election manifesto, launched in February.

Mukhriz said the government would continue negotiating with the car industry to lower prices, including introducing incentives and tax exemptions to encourage the use of components made by local manufacturers.

“The companies also can, on their own, bring down prices, for example, by increasing the volume of high-demand cars to set off the reduction in prices.”

Mukhriz was speaking after signing the Transparency International (TI-M) Malaysia’s Election Integrity Pledge, only the second person to do so after Prime Minister Datuk Seri Najib Razak.

TI-M launched the Election Integrity Pledge in March last year to push for greater integrity in the local political realm.

Mukhriz said the pledge was important to take a stand against the abuse of power and any form of bribery to make way for a fair and clean election.

In signing the pledge, he wrote: “I’m signing this pledge because it reinforces my own conviction that integrity remains a core value for all layers of society, especially among leaders at all levels, and that society sees me as a serious champion of the anti-corruption cause.”