CUTTING CAR PRICES AT 'ONE GO': Get your facts right, Mustapa Mohamed!

I was shocked when I read that Minister of International Trade and Industry, Mustapa Mohamed had said that car prices cannot be reduced (at one go).

Although Mustapa did not attribute the idea of reducing the price of cars to any particular person or political party, we all know that he was being mischievous in suggesting that the idea came from the Pakatan manifesto.

Mustapa should not insult the intelligence of the rakyat, because we all know that:

> Rafizi Ramly, PKR Director of Strategy, never suggested to reduce the car prices ‘at one go’. In fact, he had said that the excise duty would be reduced gradually over five years, compared to Barisan Nasional’s manifesto that it would only reduce car prices by 20 to 30 percent in five years. The reason given by Rafizi that it would be done over a period of time is in order for the Government to protect the second hand car market.

> By removing the excise duty over time, it may reduce the Government’s coffers by RM7 billion. However, this amount could be recovered, if the Federal Government expenditures are well-managed and corruption is being reduced substantially. Read the Auditor-General’s report every year, and there are many cases where spending was done indiscreetly.

> By reducing the prices of cars, it would not impact on the country’s economy or the car market as a whole. Instead, when the car prices become more affordable, it creates a bigger market demand for cars. When economies of scale are achieved, it would ultimately benefit the local car industry. Manufacturers such as Proton and Perodua would become more competitive. Along with this, it would create even more jobs downline. A statement he made which insults our intelligence is when he is quoted saying, reduction in car prices will cause a “….serious impact on the industry, and would affect 200,000 job opportunities, and could lead to closure of businesses.” I recommend that the minister enrolls himself in Economics 101 again, and if a minister of international trade and industry is unable to grasps the fundamentals of Economics, he should just resign from this post.

> If you look at the car manufacturing industry in countries like India, Japan, Korea, Thailand and even China, you will notice that the prices of cars are so much lower than they are here in Malaysia. By imposing a high excise duty on cars, the money collected is not even used to maintain the roads throughout the nation; instead, we have to also pay toll when using these roads. Where then does the money go to!

Disposable income

I would like to end by saying that by reducing the prices of cars, it would ultimately increase the disposable income of individuals and the families. When the individual has a higher disposable income, the quality of life can improve instead of the luxury that only certain individuals can enjoy and often beyond their means!

When the Government imposes the excise duty, its original intention was to protect the local car manufacturing industry. However, poor management of the economy by former prime minister, Dr Mahathir Mohamad has caused the country to become unattractive to foreign investors. Instead of picking Malaysia, these car manufacturers have picked Thailand to set up their operations. The Malaysian Government then has to attract companies like Lynas to set up their operations in populated towns.

So, Mr Mustapa, before you say anything, think twice!

MAILBAG