Traffic at a standstill at a toll plaza. Since ownership is easy in Malaysia, you don't have to wonder anymore why there are so many vehicles on the road.
KUALA LUMPUR: Malaysia is the second cheapest country in Southeast Asia to own a vehicle largely due to subsidised fuel prices, cheaper road tax and insurance premium, thus making it among the most competitive in terms of cost of vehicle ownership (CVO).
In a non-subsidised fuel scenario, Malaysia's CVO would rank third compared with its Asean counterparts and still largely cheaper than Thailand and Indonesia, Madani Sahari, the chief executive officer of the Malaysia Automotive Institute (MAI), said in a statement Tuesday.
As such, the perception that Malaysian passenger car prices are higher among Asean countries is rather unfounded if only the sales value is considered, he said.
MAI is an agency under the Ministry of International Trade and Industry.
The CVO is based on the purchase price of the car and its running cost, inclusive of registration fee, insurance premium, road tax and fuel cost -- elements which should be computed for a pre-determined period for it to be driven by an individual.
Malaysia has the second lowest CVO after the Philippines mainly due to cheaper fuel and a relatively lower annual road tax and insurance premium. When compared against Thailand and Indonesia, the CVO in Malaysia is lower by 39 per cent and 12 per cent respectively.
Critical is the cost of fuel in running a vehicle, whereby Malaysia has the lowest fuel price due to it being subsidised. Thailand has the highest fuel price followed by Singapore, Indonesia, Vietnam and the Philippines.
It is noteworthy that Malaysia imposes the lowest road tax and registration fee among Asean countries, parallel to that of the Philippines, Thailand and Vietnam.
On the other hand, Singapore and Indonesia are currently imposing much higher yearly road tax and registration fees amounting to 577 per cent and 442 per cent to that of Malaysia respectively.
The annual insurance premium of vehicles in Malaysia, the Philippines and Vietnam are among the lowest. In Thailand, Singapore and Indonesia, it is much higher compared to Malaysia in the order of 210 per cent, 175 per cent and 126 per cent respectively.
Providing a comparative analysis, Madani said the price of a Honda City and Toyota Vios of the 1500cc segment sold in Thailand is the cheapest in Asean, lower by 40 per cent on average to the sales price in Malaysia.
Similarly, the prices of these two marques in the Philippines, Indonesia and Vietnam are also lower by 32 per cent, two per cent and 1.8 per cent on average respectively.
Madani said prices of popular models are most expensive in Singapore, citing the Toyota and Honda models, which are higher by an average of 137 per cent compared with Malaysia.