Hornbill Unleashed

May 30, 2017

‘Remove excise duties on cars following Proton sale’

Filed under: Politics — Hornbill Unleashed @ 8:01 AM

wong-chen-proton-1PKR’s Kelana Jaya MP Wong Chen has called for excise duties on foreign manufactured cars to be phased out following the agreed 49.9% sale of Proton Holdings Bhd to China’s Zhejiang Geely Holding Group last week.

He said if the sale meant that Proton was no longer a national car, then excise duties should in principle be gradually reduced and eliminated within three to five years.

“I am against a sudden elimination in excise duty as it will cause market confusion and destroy all locally produced cars, including Perodua (under Perusahaan Otomobil Kedua Sdn Bhd), and will also decimate the used car market,” he said in a Facebook posting today.

Zhejiang Geely had on May 24 reportedly confirmed its agreement to purchase the stake together with another 51% stake in Lotus Cars from DRB-Hicom Bhd.

Wong, who heads PKR’s investment and commerce bureau, also urged the government to inform Parliament about what it intends to do following the sale.

“Keeping the details of the deal opaque and being silent on its excise duty policy are irresponsible acts, and these serve only to cause unnecessary anxiety and confusion in the market.”

He said Malaysian cars can be competitive if the culture of “unlimited protectionism” is eliminated as it breeds wastage, inefficiency and corruption, he said.

“Protectionism can be good but it must have a specific limited time frame, and the management must be based on merits and abilities,” he said.

“Proton squandered all the protectionist policies and the time has come to end it.”

He also urged the government to disclose the details of the sale and the new shareholding structure of Proton.

“Does the government still have a golden share? Are there any other third parties holding shares and acting in concert with Geely?

“I find it very hard to believe that Geely is willing to buy Proton without majority control.”

He added that he hoped Geely could achieve with Proton the same success in management that it had with Volvo.

“I hope Geely can do the same with the Proton brand and make it a regional brand,” he said.

In an interview published in Utusan Malaysia yesterday, Second Finance Minister Johari Abdul Ghani had said under the current scenario, 50.1% of Proton’s ownership is in Malaysian hands.

Proton, which was set up in 1983 as the country’s first national automobile company, has been riddled with financial problems over the last few years despite benefiting from government aid.

In 2001, it commanded as much as 53% of the local market share but this plunged to 14% last year as more buyers opted for other models.

Source : FMT Online


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