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Thursday, February 26, 2009

Is the car trade a sacred cow?

Amid the grim automotive market, a radical suggestion has cropped up — don’t prop up the market. Instead, let it naturally slide to stem the more than 10-year annual trend of rising car sales.



Many will dismiss the idea, stressing the dire consequences if the entire industry were left to fail. But its proponents argue that the industry, particularly from the sales aspect, has not been adequately supervised. Hence, the rise of what is termed as rampant car growth (RCG).

They said uncontrolled sales over the years have caused our cities and towns to choke and clog. There are simply too many cars on the roads, they said.

Building new roads is not the answer, neither is imposing taxes nor increasing toll charges and car prices.

The proposed RM5,000 incentive to swap older cars for the new ones will only cause more Malaysians to buy more cars, which may revive an ailing market but will worsen the traffic problem in the cities.


“Why precisely should we get the car sector moving again? Why is the car sector so important that we need to prop it up?

“Is it because of jobs or does it affect the whole nation in such ways that if it plunges, the whole nation suffers?

What is meant by ‘suffering’ any way?” an observer wrote to Business Times.

“Why can’t we be more creative and say ‘we really don’t need so many cars on the roads’.

“Let’s look at ways we can integrate those in the industry who have lost jobs into other industries.

“We can finally begin to address the issue of RCG.”

The observer said if many automotive workers were to lose their jobs, they may be deployed into industries that help make towns and cities a better place to live.

These could include factories making trains and buses or anything that deals with public transportation, the house-building industry or the oil-palm industry, among others.

Industry CEOs and senior executives, the observer said, should not be told and asked to lead the charge to address the RCG issue. Instead, the politicians are the real agents of change.

The politicians, he said, need to come up with aggressive “sour medicine” strategies to deal with the problem.

The observer suggested that new car sales be capped at a certain volume annually or the second hand car market made more attractive, in addition to offering perks or incentives to limit new car growth and for electric and hybrid vehicles.

There can also be timelines with penalties to achieve zero
emission. The observer knows that he is overtly idealistic in hoping for such change, but stressed that if there is hope, we can do better things.

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