Right move for the planned car prices reduction 20% ~ 30% in Malaysia

 

The Government's plan to reduce car prices gradually by between 20% and 30% within the next five years is the best mechanism for consumers and the automotive industry without disrupting the ecosystem, said an industry expert.

“Five years is the right timing to reduce car prices because a sudden reduction would impact the second-hand car industry,” Malaysia Automotive Institute chief executive officer Madani Sahari said.
He said although the car price cut plan had recently received wide publicity, the exercise itself started last year with some popular car brands reducing their car prices by 2% to 5%.

“The Government has had the car price reduction plan in the yet-to-be-announced National Automotive Policy since 2011 and had started to implement it since last year in a silent way,” he said on the sidelines of a forum on “Business Time Insight The National Automotive Policy” here yesterday.

On Tuesday, Prime Minister Datuk Seri Najib Tun Razak reiterated the Government's commitment to gradually reduce car prices by 20% to 30% within the next five years.

Madani said the car price reduction did not involve a cut in the excise duties, as Malaysian companies in reality were only paying about 40% of excise duties, even though it hovered at around 65%-105%, depending on the segment, due to value-added activities undertaken in the country.

“Completely-knocked-down (CKD) cars which are assembled in Malaysia basically have value-added activities, and are therefore receiving the privilege of lower excise duties. “Based on our calculations, most of our CKD cars enjoy excise duties in the range of 40%,” he said. Meanwhile, Volkswagen Group Malaysia managing director Dr Zeno Kerschbaumer said the car price reduction policy showed the Government's effort to put consumers into the focus of their attention.

“This perfectly matches our (Volkswagen's) policy to continuously bring the latest technology to customers at the best price possible. I think it's a big message to consumers and gives them the confidence that the Government was giving the consumers interest in the focus of their policy,” he said.

He said the move was also in line with the principle that the customers had to drive the policy. “We need to leave all our options to the customers, and the customers in the end need to decide what better fits their requirements,” he said. - Bernama

Related post:
Car prices in Malaysia will be reduced gradually 

Car prices in Malaysia will be reduced gradually

Car prices will be reduced gradually until 2017, says International Trade and Industry Minister Datuk Seri Mustapa Mohamed.

As outlined in the 13th general election of the Barisan Nasional manifesto, Mustapa said the government had promised to trim car prices between 20 per cent and 30 per cent over five years.

“Infact, since October last year, the price of 10 popular models in the country have come down an average 7.3 per cent,” he told reporters yesterday after attending the ministry’s monthly gathering, the first after Mustapa was re-appointed to the Cabinet.

He said the price reduction was part of the market process as a result of more efficient and competitive players in the automotive industry.

Mustapa said the price reduction exercise should be done in an orderly manner so as not to affect the industry’s growth and existing jobs in the automotive and related industries.

“As such, we have had discussions with automotive manufacturers and they are aware of ongoing negotiations to conclude a free trade agreement which would be implemented soon,” he said.

JF Apex Securities in its research note on Monday said the ruling coalition will likely take some time to implement car price reduction considering the potential outcome which would dampen the national carmaker, Proton’s market share.

The research house said that a feasibility study needed to be done on the overall impact so as to avoid disruptions to the automotive ecosystem.

“We do not foresee changes for months to come while awaiting update from the revised National Automotive Policy,” said JF Apex.

In the meantime, Mustapa said industry players must now be ready to step up their competitiveness edge in tandem with the industry which was becoming more competitive in Malaysia and abroad.

Besides bringing down car prices, the government was also reducing traffic congestion by setting up a more efficient transport system in the country, he added. — Bernama

Related post:
Right move for the planned car prices reduction 20% ~ 30% in Malaysia

Too many graduates in Singapore, multiple skills are important

Singapore leaders start to talk about the importance of having multiple skills rather than just obtaining a degree.

A NUMBER of political leaders have appealed to Singaporeans not to place too much faith on university degrees in an apparent effort to manage public expectations.

This is the clearest sign yet that the authorities are expecting a sustained period of relatively low economic growth and slower employment opportunities.

Singaporeans, especially parents, who have long regarded the university degree as a key to a good life will likely be shocked.

For decades, the government has been en­couraging youths to study hard or lose out in a competitive world. This apparently spells a change in education strategy.

It has also thrown more light on a baffling revelation made earlier by a senior Education Ministry official to American diplomats.

This revelation was that the global economy embraced by Singapore has made it much less conducive for over-educated societies.

Having a large number of graduates, once thought crucial for Singapore’s prosperity, is now considered not conducive to the changing manpower market, at least in Singapore.

However, none of the political leaders – the Prime Minister and three ministers – has mentioned another reason for the excess of graduates – the mass intake of foreigners.

Led by Prime Minister Lee Hsien Loong and National Development Minister Khaw Boon Wan, the leaders
are now advising Singaporeans to consider non-university routes to success.

Khaw said: “You own a degree, but so what? You can’t eat it. If that cannot give you a good life, a good job, it is meaningless.”

He added that Singapore could not have an entire nation of graduates.

“Can you have a whole country where 100% are graduates? I am not so sure. What you do not want is to create huge graduate unemployment,” he said.

Then it was the turn of Education Minister Heng Swee Keat, who said that a good qualification alone does not guarantee a career, let alone a job.

Thirdly, Acting Minister for Social and Fa­mily De­ve­l­opment Chan Chun Sing said it is not the degree or diploma that is most important for graduates, but the ability to learn a different set of skills.

“The soft skills in life have to be acquired and have to be continuously refreshed. If not, even with the best degree from the best universities in the world, we may find ourselves obsolete one day.”

They were taking the cue from Prime Minister Lee who had earlier told polytechnic students that getting a degree is not the only option. He encouraged them to work for a few years or start their own business.

“You will gain experience and understand yourself better and then be better able to decide what the next step will be,” he said at Ngee Ann Polytechnic’s 50th anniversary celebration.

All these political leaders have served to clarify a comment made by a senior education ministry official that the government does not encourage more Singaporeans to get higher education.

As revealed by Wikileaks last year, assistant director of planning Cheryl Chan told the United States diplomats that it would instead cap graduate enrolment rate at 20%.

The reason, she said, was: “The labour market does not require too many graduates.”

She also admitted that only 23% of Singaporean students who entered primary school would ever complete a four-year tertiary education, a figure far below that of the United States (50%) and Taiwan.

This gave confusing signals to a worried population, which probably ranks as one of the most enthusiastic in Asia about getting a degree for their children.

Many continue to make great personal sacrifices to help their children and are unlikely to abandon this just because of what the government says. The new emphasis is for multiple skills and drive.

So far, the government has not reduced the places in university but has instead increased them. The number of universities were raised to five with a total enrolment of about 13,250 students, with about a third being foreign students. Cutting down tertiary education is obviously not in the cards – but “discouragement” is now taking place.

The ruling party is dependent on the scholarship system to recruit its future leaders, and it is still bent on attracting bright foreign students to its shores.

In addition, nearly 18,000 Singaporeans are studying in foreign institutions, mostly in Australia, the United States and the United Kingdom. According to local media reports, the market is unable to absorb the large number of graduates coming onstream.

One report quoted a McKinsey & Co study as saying that almost half of the graduates are holding jobs that do not require a degree.

The over-supply is having a dampening effect on graduates’ salaries (again no mention of the foreign arrivals), it added.

In the past 10 years, undergraduate numbers have doubled.

The effort to get Singaporeans to abandon the paper chase for their children is almost like mission impossible. Many have begun to spend thousands of dollars a month on private tuition for their kids starting as young as seven years old.

What is the new drive aimed at? One possibility is that it is trying to reduce the number of below average students from joining the paper chase but still encouraging the bright ones to carry on.

Economically, Singapore has barely escaped another technical recession. A revised first quarter GDP shows a rise of 1.8%. Gone are the days of double-digit growth, probably never to return.

So what work can non-graduates do? One suggestion from Prime Minister Lee is: “Become hawkers.”

Singapore plans to build 10 large hawker centres. It’s a chance to develop entrepreneurial skills in a business no Singaporean customer can avoid for long – if the products are good.

INSIGHT: DOWN SOUTH
By SEAH CHIANG NEE

Related posts:

High salary and high performance require book smart and street smart!

Singapore kiasu (怕输) in a rising China
Singapore job growth high, unemployment low ...