The International Trade and Industry Ministry has denied an allegation of dumping imported cars in the country.

It said that in fact the number of cars imported had dropped after the government announced the National Automotive Policy (NAP).

Parliamentary secretary to the ministry Tan Yee Kew told the Dewan Rakyat today that only 9,233 cars were imported during the first six months of the year compared with 13,578 units in the previous corresponding period.

"The figure is only 3.3 per cent of the total local production. This is because of the implementation of the gazetted price mechanism and calculation of duties on tax-on-tax basis," she was quoted as saying by Bernama .

"The figure clearly shows no dumping of imported cars in the local market," she said in reply to Badruddin Amiruldin (BN-Jerai).

Adjustment process

Tan also said the NAP was drawn up to enhance the capacity and add value to the local automotive industry so that it was more competitive.

It was not the cause of the decrease in the number of cars sold, she added.

What happened was an adjustment process especially the decrease in on-the-road prices of new cars and this had affected the used car market, she said.

"Meanwhile, in the new car market, as 70 percent of the sales depend on used car trade-in, most people have deferred the purchase of new cars.

"Interest rate hikes averaging from 2.0 to 4.1 percent imposed by finance companies on the purchase of new cars also add burden to potential buyers to get new cars," she said.

Besides, the attitude and perception of the public that car prices would dip further, the impact of the oil price hikes and the high growth of car sales in 2004 and 2005 also contributed to the decrease in the number of cars sold, she explained.

She said the price of national cars had dropped by 3.0 to 13.5 per cent and national cars still dominated the local car market with 67 percent of passenger car sales within the Jan-June 2006 period.

"The excess stock of cars within the same period was only 70,059 units," she added.