January 21, 2003	Tuesday	Ziqa’ad 17, 1423

KUALA LUMPUR, Jan 20: The prices of cars made by Malaysian national firms Proton and Perodua may rise by up to 11 per cent under a new set of excise duties to be implemented this year, a report said on Monday.

The New Straits Times quoted industry observers as saying the government would raise duties, possibly by as much as 15 per cent, to offset a cut in import tariffs for completely-knocked-down (CKD) foreign cars. Prices of foreign cars were likely to remain unchanged, it said.

Malaysia’s two national car manufacturers, Perusahaan Otomobil Nasional (Proton) and Perusahaan Otomobil Kedua (Perodua) now have a combined market share of about 93 per cent of passenger cars in the country.

Officials from both companies were not available for comment.

Under the ASEAN Free Trade Area (AFTA), the daily said import tariffs ranging between 42 and 300 per cent would be gradually cut from this year to 20 per cent by January 1, 2005 and down to five per cent by 2008.

The tariffs were originally supposed to be reduced this month under AFTA but Malaysia negotiated a two year extension to give local automakers more time to prepare for tougher competition. Analysts told the newspaper national car manufacturers may still enjoy rebates and subsidies if they fulfil certain conditions such as introducing new models.—AFP