Car sales in Malaysia slid 11 percent year-on-year in November and are expected to slump further as consumers defer purchases to wait for new models and lower prices through liberalisation under a regional free trade pact, an industry group said today.

Sales of passenger cars and commercial vehicles stood at 31,542 units, down eight percent from October, partly due to a shorter working month in November after the Hari Raya holidays, said the Malaysian Automotive Association (MAA).

This brought total sales in the first 11 months of the year to 374,272 units, down eight percent from a year ago, it said in a statement issued through Bernama news agency.

Sales of national passenger cars in the January-November period dropped 19 percent year-on-year to 249,795 units, in contrast to a 63 percent surge in non-national car sales to 47,207 units, it said.

MAA said demand has continued to suffer because consumers were still sitting out for details of tariff adjustment from January ahead of market liberalisation under the Association of Southeast Asian Nations Free Trade Area (Afta).

Sales in December is likely to drop further as traditionally, consumers will also wait for the release of new models, it added.

The MAA said auto production in the first 11 months of the year fell to 389,872 units, down from 431,003 last year.

Production of non-national cars rose sharply by 18.5 percent to 97,979 units, reflecting strong sales, at the expense of national cars which dropped nearly 17 percent to 291,953 units.

Under Afta, tariffs on most products in the region fell below five percent in January but Malaysia has obtained a reprieve for its auto industry until 2005.

New excise duties

Prime Minister Abdullah Ahmad Badawi, who is also finance minister, is expected to unveil by the end of the year new excise duties on imported cars to replace the loss of revenue when import levies on these vehicles are reduced from January 1, 2004.

National carmaker Proton is already feeling the heat ahead of Afta with its market share shrinking to less than 50 percent for the first time in years amid intense competition from Japanese and South Korean rivals.

It has reportedly sought another 20 years of tariff protection through exemption from all import duties and excise taxes, and asking for government grants for research and development.

Abdullah has declined to confirm the report but economists warned any move to extend protection for Proton would hurt Malaysia's image and may hamper its efforts to woo foreign investors amid intense competition from neighbouring Thailand, which is fast emerging as the regional auto hub. - AFP