Why Malaysia discouraging CBU cars with small engine capacity

KUALA LUMPUR: Allowing the import of completely built-up (CBU) cars with small engine capacity will lead to the dumping of such vehicles in the local market and hamper the government’s goal of developing the local automotive industry, said Deputy Investment, Trade and Industry Minister Liew Chin Tong.

He said it would affect the National Automotive Policy 2020 goal if original equipment manufacturers (OEMs) shift their activities from local car production to the import of CBU cars.

"At the same time, it will affect the long-term investment planning for local production by OEMs as well as both national car companies.

"This will, in turn, affect local vendor development efforts and lead to the loss of employment opportunities for locals in the future,” he said during the question-and-answer session in the Dewan Negara today.

He was replying to Senator Seruandi Saad’s query on the government’s willingness to review the standard operating procedure and import permit regulations for the entry of vehicles with low horsepower such as those with 660cc.

Liew said the focus of the local automotive industry roadmap is on encouraging local assembly activities by national car makers and OEM companies regardless of vehicle brand or engine capacity.

"Having a small engine capacity does not necessarily mean a particular vehicle would be sold at a cheap price as imports are still subject to import tax, excise duty and sales tax.”