Oriental expects certain car prices to go up...

Oriental Holdings Bhd expects the prices of cars in the 2-litre, 2.4-litre and 3-litre segments to increase when the National Automotive Policy (NAP) is finalised, its group managing director Datuk Robert Wong said.

He said the prices of four-wheel-drives and multi-purpose vehicles would also go up in line with the NAP framework that was announced by Prime Minister Datuk Seri Abdullah Ahmad Badawi last week.

Oriental's subsidiary Oriental Hyundai Sdn Bhd is the distributor of the completely-knocked down (CKD) Accent, Elantra and Sonata models.

However, Wong said it was difficult to gauge the exact impact of the NAP as the framework unveiled last week lacked clarity. He said in the longer term, car prices might taper off and come down after 2008 but in the short term he did not see prices coming down.

He said a new automotive policy or guideline was necessary as it would allow forward planning by both local and foreign players in terms of investments.

Wong said the government was still studying as to whether industry players preferred the proposed new tax structure or the existing duty structure, and that a firm policy would be announced soon.

He said the framework allowed for industry players to choose between the old structure and the proposed new tax structure.

“Earlier because of the higher duty structure, some of the car manufacturers absorbed the CKD costs.

"If they are comfortable with the existing structure they will not want to shift any pricing for the next one or two years,” Wong added.

Wong said the NAP framework created a more lucrative market at the outset for locally assembled cars with higher local content.

He said the NAP framework benefited automotive assemblers and parts manufacturers as they could expect grants in return for increased research and development and use of local components.

Meanwhile, Wong said the new five-door Accent will be launched and made available in December in two colours Knight Black and Sunbean Silver.

He said Oriental Hyundai expected to sell about 8,000 Hyundai vehicles this year and about 700 units of Hyundai cars per month after the launch of the new Accent.

He expected sales next year to grow by between 20% and 30%, but that would depend on the eventual impact of the NAP.

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