SHAH ALAM: UMW Holdings Bhd may stop exporting vehicles to Thailand if it does not meet its sales targets as a result of having to price its units higher due to increased duties.

Group managing director and chief executive officer Datuk Dr Abdul Halim Harun said should the Thai government impose higher import duties, it would translate into a price increase of a “few thousand ringgit” per vehicle.

“This will result in a less competitive situation. We will continue exporting units to Thailand, but if this (pricing) affects our sales, we will have to relook our strategy,” he told reporters yesterday after the launch of Toyota’s latest forklift, Mastery 8 Series.

Abdul Halim said UMW did not have a choice but to abide by the duties imposed as it had purchased completely knocked down units (CKDs) for export.

He said the International Trade and Industry Ministry would be discussing the issue with its Thai counterparts.

“We have not got any feedback yet and we are assured that the Government will take up this matter,” he said, adding that the Thais recently formed a new government and had yet to set a date for discussions.

It was reported recently that Thailand had refused to lower the 20% import duties imposed on vehicles produced in Malaysia to 5% unless approved permits (APs) are removed.

Thailand had claimed that APs were non-tariff barriers that prevented vehicles from coming into the Malaysian market.

Asean countries have to abide by the Common Effective Preferential Tariff (CEPT) scheme whereby goods traded in Asean that meet the 40% Asean content rule, would have their tariffs cut to 0% to 5%.

CEPT is the implementing mechanism of the regional trade pact in the Asean Free Trade Area.

On the group’s target to produce 100,000 vehicles by year-end, Abdul Halim said the Camry, launched recently, had received good response and would help the group achieve this target. The company received orders for 2,600 Camrys last week.

Abdul Halim added that the group was in the early stages of expanding Perusahaan Otomobil Kedua Sdn Bhd’s production capacity to 25,000 units by end-2007 from 200,000 currently.

On sales of the latest forklift, UMW Corp Sdn Bhd's industrial equipment division executive director Kuah Kock Heng said the company planned to sell 1,500 units within 12 months.

He expects the new forklift to boost UMW Corp’s market share to 55% by the end of 2007 from 48% currently.

“Up to Wednesday, we have received orders for 150 units,” he added.

Kuah said the forklift business also encompassed a fleet management programme, whereby clients could rent units from UMW Corp, which would service and maintain these units.

“We plan to invest RM70mil to increase the fleet size by 1,000 units from the existing 2,000 units within 18 months,” he said.

To date, it has invested RM42mil in this programme, with 250 clients in the electrical and electronic, logistics and food and beverage sectors.

UMW Corp expects to achieve total sales of RM230mil by year-end, contributing some 3% to group revenue.

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