Ease the car-ownership burden, says consumer group

Lack of public transport has made the car a necessity, says a consumer group.

PETALING JAYA: The country’s largest consumer body has urged Putrajaya to review policies which drive up the cost of car-ownership, saying it contributes the most to household debt after housing and food.

Paul Selvaraj, chief executive of the Federation of Malaysian Consumers Associations, said that while they believed the government’s priority was public transport, car prices also need to be lowered so that people did not have to spend so much on buying cars.

He was commenting on an FMT article that Malaysian car buyers were getting lower value for money despite paying high car prices.

“Because our public transport is poor, cars have become a necessity, and necessities should not cost the people so much.

Paul Selvaraj, head of Fomca.

“A big chunk of a person’s salary goes towards owning a car, it’s not just the car loan but the maintenance, spare parts, petrol and so on.”

He said Malaysian car prices should be on par with other countries, bar Singapore where the prices are set high but with a good public transport system, meaning cars were not a necessity.

“For how many more years are we going to protect the local car industry?” he said. “Continued protection only burdens the people.”

PKR’s Subang MP Wong Chen said car prices were high because of excise duties on cars and the approved permits (AP) system in the name of protecting the local car industry.

The government should study whether these measures were still valid and in compliance with international trade treaties.

“The two largest expense items of Malaysian middle-class families are houses and cars. So if we reduce excise duties and phase out APs, car prices will drop and the middle class will have greater disposable income.”

This, he said, could spur greater economic consumption and turn around the economy.

But if the government chooses to maintain the excise duties, then it should set a time for this to end, and the proceeds from the duties must be used to fund better public transport.

“I hope the Pakatan Harapan cabinet will be brave enough to shake things up and not allow crony capitalism to return unabated through the AP system at the expense of the public.”

An economist, Barjoyai Bardai of Universiti Tun Abdul Razak, says the different priorities of different generations of car buyers has led to cars being built differently.

“Cars today are not built to last like those of decades ago,” he said. “In the old days, people would maybe buy one to two cars in their lifetime, now many people change cars after owning it for less than 10 years.”

The priority for car makers was less on making something that would last for a long time, but more on what the market wanted in terms of design and features.

Barjoyai said doing away with tariffs will result in lower car prices but the local car industry might collapse.