The Malaysian Automotive Industry Post-AFTA

1.0 Introduction

The automobile industry in Malaysia is closely linked to the history of Perusahaan Otomobil Nasional Berhad (PROTON). It is the national car project whose brainchild was none other than the Prime Minister Dr Mahathir himself. Prior to the incorporation of PROTON on 7 May 1983, the industry comprises mainly of assemblers of foreign cars such as Tan Chong Motors, the assembler for completely knock down (CKD) Nissan cars and Kah Motors, the assembler for CKD Honda cars.

Since the inception of PROTON and subsequently PERODUA, the country second national car company, Malaysia maintains several measures to protect its local automobile industry which includes a host of other automotive components, spare parts and accessories vendors supporting the national cars by imposing one of the highest tax duties on automobiles and motorcycles in South East Asia and probably the world plus a list of other non-tariff barriers. The measures include duties on passenger car which ...