Cheaper Cars: Fantasy or Reality?

BN, Pakatan spar over car prices
Nigel Aw
11:55AM Oct 11, 2012

The issue of cheaper cars heated up yesterday as the topic dominated a budget forum between Barisan Nasional's Kota Belud MP Abdul Rahman Dahlan and Pakatan Rakyat's Petaling Jaya Utara MP Tony Pua.

Pua (left), who began by comparing Pakatan's shadow budget with the federal budget, pointed out that the former focussed on increasing disposable income rather than providing one-off assistance.

"Most households have a median income of between RM1,500 to RM2,500 only. We looked at what is their largest monthly expenses and it was paying for car loan. Just a Myvi may cost RM600 to RM700 a month.

"If we reduce excise tax by 20 percent - we start with 20 percent first or the second-hand car industry may collapse - households can save RM70 to RM100 a month, that's a saving of RM1,000 per year," he told the forum in Shah Alam last night.

Adding on, Pua said the second highest expense was for housing loan, and on top of building more affordable housing, Pakatan will go a step further than BN by also breaking up the monopoly in the cement and steel sectors to make building materials cheaper.

'Contradiction of the highest degree'

However, Abdul Rahman accused Pakatan of taking on the issue in "silo" by failing to consider the myriad of issues that would also be impacted from the reduction of car prices.

"If you close a hole here then another hole will open up there. For example, you have not explained how you are going to solve the petrol subsidy problem when cars flood Klang Valley (and consume more petrol).

“I am also not confident that reducing excise duty will help reduce car prices... If excise duty goes down, cars like Honda may still maintain their prices because there is demand in Malaysia," he said.

He added that even though car prices in Malaysia were more costly, other related expenses such as petrol, insurance and road tax were still among the relatively cheap.

Abdul Rahman (right) also blasted Pakatan for wanting to make Kuala Lumpur a liveable city but concurrently would allow large number of vehicles to flood the city with cheaper cars.

"This is a contradiction of the highest degree," he said.

Responding to this, Pua pointed out that the car to population ratio had already exceeded one to one.

"Even if we make cars cheaper, there would be no marked increase because a person can only drive one car at a time, no one can drive two at a time and the maximum number of cars are already on the road," he said.

Improve public transportation first

He added that Pakatan planned to increase the number of buses in Klang Valley by the thousands to compliment the MRT system that is being constructed.

Abdul Rahman rebutted the argument that car numbers would not significantly increase, stating that this was merely an assumption.

"There are many people using buses and LRT, this means many people in Klang Valley still do not have a vehicle," he said.

To this, Pua replied that the public would still opt for public transport even if they have their own vehicles to get to work and a car was mostly for family leisure.

"It is not that anyone who starts work wants to buy a car, some people buy a car because they have no choice, or else they cannot go to work," he said.

He added that only after people have a real choice between public and private transport, after the former is adequately improved, considerations could be made to slash petrol subsidies.

Another panellist at the forum was Institute for Democracy and Economic Affairs (Ideas) chief executive officer Wan Saiful Wan Jan and the session was moderated by Universiti Islam Antarabangsa (UIA) lecturer Maszlee Malik.