Friday, 16 July 2010

Car Prices in Malaysia is one of the Highest in The World

I have been following a cool blog...Salvatore-Dali of Malaysia-Finance Blogspot since 2007, this blog is easy to read and very informative and have plenty of info about Finance and the Economy in General, from his postings recently I find that he is into football and the arts as well. This is a posting of his which will interest all discerning Malaysians:

The Big Mac Index

The Economist's Big Mac index is a fun way to keep track of relative purchasing power parity. Though the index has its weaknesses, its still a reliable rough guide to what your currency could buy. The cost of a Big Mac, representing the cost of producing one will somehow include rental, distribution and transportation costs, cost of ingredients, wages, advertising, etc. Hence you could be earning less effectively but you could be buying a lot more in reality.

Malaysia is supposed the second cheapest place on the index followed by China. Is this a reflection of competitiveness? Or a reflection of how many "things are subsidised" in that country? We all know the answer.

The Economist's Big Mac Index

Now, let's do a Big Mac index of our own but this time use the cost of buying a car - I bet you we'd rank second from the top, just below Singapore compared to the rest of the world. How in the world do we get to be one of the most expensive place on earth to buy a car??? Again, we all should know the answer.

What's really pathetic is when you divide the cost of a car with the average wage earned per country - I am bloody sure we would be NUMBER ONE in most unaffordable list.
Sorry for the glitch above..the full posting can be read here.

I agree, the price of cars in Malaysia is astronomical, there is however no global parity standard for comparison between average earning to average car price on a per country basis. If there were, probably Malaysia will be in the negative..i,e the average Malaysians cannot afford to buy cars.

The lousy transport system however makes sure that we have to buy cars whether we like it or not. On top of the AP system and the high custom levies which makes our cars one of the most expensive in the world, almost all good highways are tolled and the rates keep on going up without any end in sight.

The Government should really look into:

1. Improving the road transport system. (Improving the services provided by Buses, MRT, Railways,Taxis and make new highways without charging too much toll )

2. Taking over all the Private Toll Highway and give immediate reduction in toll by 50% for all road users. No more paying wasteful subsidies to highway operators who are already making tonnes of ringgit.

3. Stop the AP system...use the Singapore system where the Government sells certificate of elligibility to buy vehicles, this way Government gets money directly.

Also please reduce the taxes on Imported Cars lah by a wee bit. It gets ridiculous that a 2000 cc Sedan is more expensive than your average double storey linked house lah. The Money saved from paying less for cars can be used to buy OTHER purchases such as houses etc which in turn generates other business for other industries besides those automotive related as well. Kata Gomen mahu naik gaji pekerja, all good to hear but how? Ruling BN party ought to Walk the talk lah. Transform to votes for BN also you know and why not.

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