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Tweaking of SST leads to lower car prices but not for all models

Honda City saw RM 2,094 slashed from its original price of RM 75,930 with GST

Honda City saw RM 2,094 slashed from its original price of RM 75,930 with GST

Ahirul Ahirudin
Written by Ahirul Ahirudin

KUALA LUMPUR – September 4, 2018: A late decision by the finance ministry to tweak the Sales and Services Tax has reduced the prices of some vehicles, most notably completely-knocked-down (CKD) models.

But completely-build-up (CBU) models or imported ones will definitely cost more.

CKD refers to vehicles that are imported in parts and assembled locally. Manufacturers usually use some local content in these vehicles which usually qualify for some tax cuts, depending on the percentage of local contents used while CBU units usually don’t qualify for tax exemptions.

Previously, the Malaysian Automotive Association (MAA) said that prices of cars were likely to increase once SST was reinstated (from September 1).

Perodua, Honda, and Volkswagen have released their new price list and the amounts are encouraging.

Perodua vehicles have a price cut of up to RM1,700 or 4.07 per cent of the price under the Goods and Services Tax (GST), except for two variants of the Perodua Alza, while Honda is offering a price cut of up to RM4,900 or 3.13 per cent cheaper.

Prices of Volkswagen cars will be cheaper by up to RM3,600 or less that 1.81 per cent from prices with the GST but all variants of its popular Golf model will go up by up to RM8,400.

What is particularly interesting is that the manufacturers are throwing in extra incentives to lure buyers.

MAA president Datuk Aishah Ahmad described this as good and that healthy competition will always benefit consumers.

For example, Volkswagen introduced a price protection scheme that will keep prices at zero-rated GST rates, with the offer valid for all models registered by November 15.

Proton has also said it will absorb all SST costs for all models for this month.

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Ahirul Ahirudin

Ahirul Ahirudin