“Cars will be charged 10 per cent sales tax effective September 1, which, in our view, will be passed down to consumers.”
Higher new car prices may slow down volume, says Kenanga
Kenanga Research analysts
NEW vehicle prices are likely to go up by about eight per cent with the introduction of the Sales and Services Tax (SST) tomorrow.
This may weaken industry sales, according to Kenanga Research analysts who made the forecast based on “Guide on Proposed Sales Tax Rates” prepared by the Customs Department.
“Cars will be charged 10 per cent sales tax effective September 1, which will be passed down
to consumers by the automotive players, in our view.
“We expect car prices to increase by an average of eight per cent that may weaken the car sales volume based on a back-ofthe-envelope calculation, as the new SST rate is the same as the old SST rate,” they said in a report on UMW Holdings Bhd’s latest interim results.
They expect UMW Holdings to experience limited growth in car sales pending completion of its new Bukit Raja plant in Selangor, which is expected to be operational in early next year.
In the first quarter of this year, UMW Holdings — through its subsidiary UMW Toyota Motor Sdn Bhd — launched the all-new Toyota CH-R, all-new Toyota Harrier and Lexus models, namely LS, RX350L and Lexus NX300.
In the second half, the group was in line to unveil the all-new Perodua D38L sports utility vehicle, said Kenanga Research.
The firm said UMW Holdings’ strategic exit from the oil and gas industry should improve its profitability with a more solid balance sheet.
Meanwhile, Volkswagen Passenger Cars Malaysia (VPCM) announced an extension of the tax holiday for its models under its price protection scheme.
The scheme covers all Volkswagen models registered till November 15, while stocks last.
With the implementation of the
SST, any difference in the vehicle price based on the current zero per cent Goods and Services Tax prices will be absorbed by VPCM.
Its managing director Erik Winter said the response had been overwhelming in the past three months since the zero per cent GST announcement.