The National Economic Action Council (NEAC) on Thursday recommended lower down payments, longer repayment periods and tax exemptions to help the industry.

The Malaysian Motor Traders Association (MMTA) said the measures would apply only to local cars made by Perusahaan Otomobil Nasional Bhd and Perusahaan Otomobil Nasional Kedua (Perodua).

The MMTA comprises 27 car assemblers and importers, and the models are predominantly foreign. "Initially when we heard about the incentives we were excited," MMTA chairwoman Aishah Ahmad told reporters on Friday. "But when we went through them, we were disappointed." In its National Economic Recovery Plan released on Thursday, the NEAC recommended raising the excise duty exemption on Proton cars to 70 per cent from 50 per cent. It said the increase would apply "for a limitedperiod".

It called for a six-month extension of the 50 per cent exemption on excise duty on the Tiara, a variant of the French car maker Peugeot SA's Citroen AX car which is made by Proton.

The NEAC also recommended the suspension of a 13 per cent duty on imported Proton components. It said the three measures would cost the government nearly 250 million ringgit if implemented this year. Earlier, the government had raised a credit ceiling for cars costing up to 40,000 ringgit. The ceiling was raised to 85 per cent of the car price from 70 per cent. The government had also lengthened the maximum repayment period on loans for cars costing up to 40,000 ringgit to seven years from five.

Virtually all cars costing less than 40,000 ringgit are made by Proton or Perodua.

Asked if foreign car dealers in Malaysia felt abandoned by the government, Aishah said: "Actually that is the feeling." "The relaxation of the cap on loans and repayments should have been extended across the board," she said. "Basically, ourmembers are also contributing to the economy."

Aishah said the NEAC seemed to have ignored the MMTA's concerns despite the association's lobbying of the council while the National Economic Recovery Plan was being drafted.

Aishah said car sales had already been hit in Malaysia, and the NEAC's decision to limit the car measures to local firms "will definitely hurt us more".

The MMTA said on Friday that passenger car sales, including local cars, fell 64 per cent to 51,605 units in the first six months of 1998 from 142,193 in the year ago period.

Sales for the full year 1998 are forecast at 110,000 units, or 64 per cent lower than the 307,907 units in 1997, the MMTA said in its half-yearly report.