Now, Dr M says high car prices is meant to limit fuel consumption, REDUCE TRAFFIC JAMS!

Malaysians have never really understood why they have to pay so much more to own a car. Today they have been given an answer, one that will likely disgust them further rather than satisfy their curiosity.

“Actually the price of cars is high because we want to limit the consumption of fossil fuel. The big-engined luxury models are taxed 300 percent. Otherwise the rich owners would enjoy the subsidy more than the owners of small cars,” wrote former prime minister Dr Mahathir Mohamad in his latest blog posting today.

Using traffic jams in city areas to back his argument, Mahathir said cheaper cars would make the situation worse.

“And of course more and longer traffic jams. The jams also contribute much to pollution in Kuala Lumpur as the engines run but the cars are going nowhere,” he added.

Mahathir also defended the policy to protect national carmaker Proton saying it had helped to prevent a big outflow of foreign exchange to purchase imports.

“We will lose much of our engineering capability which in turn would lead to more job losses as engineering-based industries cannot fund skilled workers. There will be more outflow of funds,” he explained.

Proton’s market share said Mahathir had plummeted from 80 percent to 26 percent in Malaysia.

Should it goes down further, Mahathir warned of that Proton might face shut down and as such, a total of 150,000 jobs generated by the national car industry would be lost.

“This will not lower the prices for foreign cars. The Government would still have to recover subsidy cost,” he reminded.

On calls to demolish Approved Permits, Mahathir said the proposal would only “flood the market with foreign makes which will be the death knell of national cars.”

Former Finance Minister Daim Zainuddin had earlier claimed that removal of APs would translate into cheaper cars for the rakyat.

“APs are issued not only for cars but also for sugar, flour, rice and a variety of other items. Some people have benefitted from this system over the past 80 years. They have become billionaires. There has been no demand to stop these APs. The recipients live a charmed life.

If we must reconsider the AP system, it must include all the APs. The effect on our economy and trade balance must be accepted by us all,” argued Mahathir who clearly disagreed. - Harakahdaily