'Expensive local cars causing more household debt'

The government has been urged to review the current automotive industry policy as it has burdened local consumers with high bank loans.

“We need to solve this issue so that the country will not be burdened with loans,” said Shah Alam member of parliament Khalid Samad (pic) at the parliament lobby yesterday.

Khalid said the current policy, meant to protect national car Proton, had forced car buyers to pay more for the locally-manufactured car than other countries whose prices are based on the market.

Saying the 25-year old national automotive policy was the cause of the high price, Khalid said the policy, introduced by former prime minister Dr Mahathir Mohamad, only benefited Proton.

The result, according to Khalid, was a chain impact of additional debt per household.

“Household debt for cars is due to our high car price, among the highest in Asia,” he explained.

Khalid cited a recent CIMB Investment Bank report which said 27 per cent of household debt was from car loans. The figure accounts for 76.6 per cent of the country’s Gross Domestic Product (GDP).

As such, Khalid said the automotive policy did not help Malaysians, adding that the problem of household debt was also not addressed by prime minister Najib Razak in the 2011 budget.