Malaysia may make a concession to Thailand over import tariffs on larger-engined cars, AutoAsia Online said.

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Thailand hopes that Kuala Lumpur would waive its usual high tariffs on larger cars with engines of more than 2,000cc, the website said.


According to AutoAsia Online, Thailand’s deputy finance minister Suchart Chaovisit said the proposal was put to Malaysian officials at a meeting of Southeast Asian trade ministers in Brunei and got a good response.


The website said that Malaysian officials confirmed that Thailand has floated a proposal over tariffs on larger cars and said it would be “considered”.


There is a chance that the deal could go through since Malaysia’s own Proton car company does not make any cars with engines larger than 1,997cc. It turns out a few hundred Perdana V6 models each month but the vast majority of its output is in the 1,300-1,600cc range, AutoAsia Online said.

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Foreign car makers who have set up plants in Thailand have complained long and loud that Malaysia’s decision to maintain prohibitive tariff barriers has made a nonsense of their plans, which were based on the ability to ship cars and components freely around ASEAN under the ASEAN Free Trade Agreement (AFTA). BMW, Ford and GM have been at the forefront of this lobbying effort, AutoAsia Online said.


Rather than lower tariffs to 0-5% in 2003, Malaysia will keep tariff barriers high until 2005 in order to give national carmaker Proton and local suppliers more time to prepare for open competition, the website added.


Bangkok has been pressing KL to make some kind of compensation for its decision to extend protection of its auto market, thereby breaking the terms of the ASEAN Free Trade Agreement (AFTA), AutoAsia Online said.