Having official “National Car” status, as defined by the Malaysian government, can bring big benefits to a company. With a 50% exemption from local excise taxes, official status makes these cars far cheaper than non-Malaysian alternatives.

There are currently four local Malaysian car companies: Proton, Naza, Inokom and Perodua. Arguments over just how Malaysian these companies are, however, could see Proton alone retain National Car status and prices for the other three manufacturers soar.

There is apparently a push underway to require the other companies to make a greater commitment to local parts manufacture and R&D to keep their status. Perodua, the largest producer by sales, is part-owned by Japan’s Daihatsu and Mitsui. Foreign companies such as Toyota and Honda, who assemble vehicles in Malaysia with foreign-made parts, are taxed at import rates.

Moves to take away Perodua’s status may cause a backlash from Japanese shareholders and the country’s embassy, who see the joint venture as one of the most successful. A decision will be made once the government has finalized its National Automotive Policy (NAP) later this month.

article & source: Business Times