KUALA LUMPUR (March 28): The government will continue to offer incentives to reduce excise duty on car manufacturing companies involved in value-added activities with the use of localised automotive components, according to the International Trade and Industry Minister.

This is to reduce the cost of installation and production of vehicles as well as to encourage the growth of the parts and components industry locally, said the minister in a written response dated March 22 to Datuk Seri Dr Muhammad Leo Michael Toyad.

Meanwhile, the government has also devised a number of strategies to ensure the performance of embedded automotive industry remain competitive.

"The government also emphasises the development of after sales activities through authorised treatment facilities and remanufacturing roadmap," the written response stated.

The roadmap outlines the guidelines for transforming after sales activities in the development of green automotive industry for a more sustainable future.

It was reported earlier the total industry volume for the local automotive market saw a 13% drop in 2016 to 580,124 units from 666,677 units sold in 2015.

Previously, based on the Malaysian Automotive Association's website, no import duty is imposed on vehicles imported from Asean countries. However, a 30% import duty is applied on vehicles shipped from outside Asean. On top of that, vehicles sold are subject to excise duties ranging between 60% and 105%, on top of the 6% goods and services tax.

Muhammad Leo brought up this issue to find out about the government's emphasis on the development of the automotive industry with the economic conditions in 2016, which had an impact on the purchase of cars.