A new tax and tariff structure for the country's auto industry has been delayed to September, International Trade and Industry Minister Rafidah Aziz said today.

"I do believe it will be in September," Rafidah said.

In December, Malaysia had announced it would cut import duties from January 2005 on cars from Southest Asian countries in line with a regional trade pact while still giving local producers' rebates so as to minimise the impact.

Then in January the government decided to delay implementation until June pending a review of the tariff structure on concerns that foreign car companies might shelve fresh investments or even relocate current Malaysian operations.

Rafidah said she would soon submit a blueprint to the cabinet regarding an overview of the local automotive industry.

"It is with the idea of making Malaysia a regional hub for automotive manufacturing and the manufacturing of auto parts and components," she added.

Investments plunged

Total investment in Malaysia's automotive sector plunged 66.7 percent to RM1.1 billion in 2004, the government said in May.

Malaysia, which lobbied successfully for more time to comply with a regional trade liberalization agreement, has previously promised to cut tariffs on cars made by members of the Association of Southeast Asian Nations (Asean) to 20 percent this year and to five percent by 2008.

The government, however, raised excise taxes on cars and parts sold in Malaysia to 40-250 percent from 30-100 percent last December, effectively nullifying any advantage from the tariff cut for local consumers and foreign rivals of national car manufacturer Proton Holdings, which receives rebates.