Many would-be car buyers who held off in anticipation of cheaper vehicles because of the government's commitment to lower tariffs under the Asean Free-Trade Area are now in a quandary.
Instead of cheaper vehicles, they could actually end up paying more for their pride and joy.
Although the Malaysian government has slashed import duties to 25 per cent from this year, it has also raised excise duties by between 30 and 100 per cent on imported vehicles to offset its revenue loss.
Following the latest brouhaha, some of the procrastinators were hoping that the government would undertake a review. General uncertainty about prices remains, as car companies are still working out the details.
But Prime Minister Abdullah Ahmad Badawi said that the government would leave prices to market forces because government figures indicated that prices would not rise.
Responding to reports that cars could cost more than last year, Mr Abdullah, who is also the finance minister, said that this could be due to several factors, such as dealers not being prepared to reduce profit margins and the unfavourable exchange rate of the euro and yen against the local currency.
He had this to say to dealers: 'If you lower the price now and sell more cars, the volume will ensure your profit.' This was echoed by International Trade and Industry Minister, Rafidah Aziz, who said that if dealers were willing to reap less profit, they could always reduce prices to bridge the disparity between the old and the new.