Thus, most young working adults in Malaysia are manufacturer's target market, in fact if you don't own a car in Malaysia, its very likely you can't get a decent job that pays you enough for three meals and accommodation. However, given the national automotive policy of Malaysia, cars are heavily taxed, which is totally out of tandem with the nation's average income. Henceforth, there are many out there who're 'shopping' (or forced to shop) cars around the region of RM50-60k. Which would generally mean they are earning an amount of around RM3,000 - RM4,000 - Mind you, a pay that most senior executives and managers are earning. So what can you get for around RM50-60k in Malaysia? NOT MUCH.
For new cars, this would mean the largest, most well spec car in this price bracket would be the Proton Persona. A car bigger than that of Vios, more luggage holding capacity, full leather, GPS, Bluetooth connection, dual airbags etc, in short, specification levels that will leave a Camry or Accord in blush.
However, car buying in Malaysia does not just constitute for mobility or transport, because of the high selling price, it has become a symbolic status of wealth, social status, and an outright measuring scale of a person's taste and achievement.
Now at this point, there must be some readers here that would go 'Common, cars are just meant for transportation purposes, only idiots would be vane enough to go for more.'
Yeah right, try renting a single bedroom with a double bed and ask a girl to marry you.
Thus, is Persona your only choice? Is every penny spent on a Persona worthwhile? Compared to the slightly smaller, slightly less well equipped and slightly uglier Vios?
Yes and No actually.
Cars that are sold in Malaysia are extremely expensive, our dear Nissan Latio 1.6, which sells for around RM90k+ in M'sia, was sold at $9900 USD, less than RM35k! Of course it is the ridiculous import and excise duties, but are they still ridiculous? Let's have a quick look:
This is the CKD (Complete Knocked Down) import tax rates established since March 2006. Clearly stated, for countries within ASEAN, there are no Import Taxes on CKD cars, as for excise duties, tax rate is on a staggered rise of 5% for every displacement threshold, from 75% to 125%, and finally a 5% Sales Tax.So let's have a look shall we, at our humble Toyota Vios, one of the most popular, non national models, assuming an initial price of RM45k, after the 'supposingly' 75% and 10% tax, ended up around RM80k; which is what they are being sold for.
HOWEVER.
There is something called the Industrial Exemption Fund, which deems Thailand parts as 'Local Parts' as well, giving 100% exemption to these Thai made Vios (or City for that matter), meaning - YES. These Japanese super popular cars are given full tax exemption!
So why are they still selling at a price of over RM80k? Simple, they simply wouldn't want to, and the government wouldn't 'encourage' them as well, as local cars are still very costly.
Why? Economies of scale.
According to OICA, the total vehicle production of Malaysia in year 2007 is 441,661 units, a declining of 12.2% over prior year, as for Thailand, the total vehicle production is 1,287,346 units in year 2007, an increase of 7.8% over prior year. That speaks alot for our National Automotive Policy right? Which acquired better technology, started earlier than Thailand, of which we're now three times behind them in volume, and declining.
So this makes sense, producing vehicles in a smaller scale, you'd get less numbers to divide amongst, for your workers, electricity bills, all the way to ordering parts from suppliers. Thus, if Malaysia had no way of producing vehicles in a larger scale, its impossible for them to lower the price, and if local makes can't lower their selling price, do you think the government would encourage the Japanese to lower their selling price? Of course not, the Japanese can and could still afford to lower, for if they do, the local makes are ready to bid goodbye, thus in this difficult dilemma, we could safely conclude that, the Japanese are 'FORCED' to earn more of our hard yearned money, thanks to our government.
It all seems loss right? That Malaysians are destined to get ripped off? Wait, check out our glorious and luxurious Toyota Camrys and Accords, selling well over RM170k, what do you get? Dual airbags and a bunch of alphabets that lights on itself at times and that's it. If you are a high level executive sitting at the back of your luxurious Japanese E-Class, be well aware that your thinking brain is not very much protected against the window or side doors if a car came crashing from your side, but don't worry, you'd at least be able to climb out of the window your very head helped smashed in the crash, if you still could.
YES, even if they earn that sort of money from selling us our most loved Vios and Citys, there's not much love for our lives, where a humble Yaris in Europe gets 6 or 8 airbags. And there're no SatNavs, Bluetooth as well.
So? Buying local cars, they're not exactly worthwhile because of low economies of scale, buying imported cars, they're not exactly worthwhile because they're either taxed heavily, or not encouraged to sell cheap. So, will our dream of the government lifting import and excise duty, thus cars can be cheaper, forever come true? Likely not, as this is a good example of the vicious cycle that our car industry surrounds itself to. What can we do? Demand higher amenities in the cars we buy, no more pesky CD/FM units, ask for MP3 with USB plugins, ask for Sunroofs, electric powered seats with memory, ask for 10 airbags (go educate yourself if you're a dimwit thinking all airbags deploying together in a crash), ask for 5-speed gearboxes, ask ask ask ask ask. That's the only thing I could somehow think off.
So, not buying local, not buying CKD, how about fully imported cars? Yes, we've all heard the sayings of "Of course BMWs are good, they're so freaking expensive." Well let's take a look at how 'expensive' they were compared to our RM100k Perdana. If their initial price is also RM100k, then slapping on all duties, it will end up around RM290k, which is again the standard selling price of these European marques here, if not cheaper.So let's see, a 6 Airbag, memory seat, SatNav equipped, Bluetooth, MP3 European sedan is actually around RM100k, whereas our dear Japanese cars who're not taxed are being sold for around RM170k. You figure it out yourselves, which is actually more expensive, and who has been earning our money big time over the past oh so many years.
So the next time before you came up with that kind of statement, think hard, that the amount of money you paid for a CBU imported car are actually taxes by the government for those lovely street lamps in Putrajaya, whereas the amount you paid for local cars, are for their inefficiency on economies of scales, and the amount of money you paid for CKD Japanese cars, are to pay them more, so our local car industries could continue to flourish - under the government's quiet consent.
For purpose of not being held accountable for what I just said, perhaps I'm lying, or perhaps its totally baseless, readers will tell.
