Friday, March 24, 2006

Auto companies expected to pass duty savings to new buyers

KUALA LUMPUR: Car buyers can walk into showrooms nationwide and expect to see lower prices for completely knocked down (CKD) passenger cars in the next few days.
Malaysian Automotive Association president Datuk Aishah Ahmad said there would be a reduction in CKD passenger car prices due to the new duty structure announced in the National Automotive Policy (NAP) on Wednesday.
“Car companies will be passing the duty savings to new CKD passenger car buyers with almost immediate effect,” she said.
Automotive players met with the Finance Ministry yesterday afternoon to discuss details of the NAP, which included the implementation of the new duty structure.
“Everyone has gone back to do their homework. It will take a few days but there will be a reduction in CKD passenger car prices. However, the prices will vary from model to model and from car company to car company,” Aishah said.
It is believed that national car manufacturer Perusahaan Otomobil Kedua Sdn Bhd (Perodua) will announce today a new price list with reductions in price for almost all its passenger car models.
It is understood that effective tomorrow there will be a 2% to 3% reduction in the price of Perodua passenger car models with the exception of the Kancil 660cc and 850cc manual transmission models. This will translate into a reduction of RM800 to RM1,500.
An industry observer noted that Perodua could have decided not to reduce the prices of the Kancil 660cc and 850cc manual transmission models as their prices were already reasonable and affordable.
Besides Proton and Perodua passenger cars, locally assembled passenger cars include the Toyota Vios, locally assembled Honda City, Nissan Sentra and Atos.
Aishah, however, does not expect the prices of completely built up (CBU) or imported vehicles to be reduced under the NAP.
She sees prices moving up as the Government-gazetted price would have taken into consideration any under-declaration of the transacted value of imported cars for the purpose of tax avoidance.
“Prices for multi-purpose vehicles, 4WD vehicles and sports utility vehicles up to two litres are expected to go up under the new duty structure,” she said.
“Therefore, consumers are encouraged to buy forward, as the old stocks will still be priced lower under the old duty structure,” Aishah added.
UMW Toyota Motor said in a statement that prices of passenger cars would trend downwards.
“Unfortunately, prices of multi-purpose vehicles will go up. We are working on the details of the prices in accordance with the new import and excise duties imposed,” it said.
The company said it would announce the final price list of Toyota vehicles over the next few days.
Prime Minister Datuk Seri Abdullah Ahmad Badawi said Proton would face greater competition, and the prices of its cars would “unavoidably be reduced because it has to compete in the market.”
“All players in the automotive industry cannot run away from competition,” he told newsmen after launching the Islamic Development Bank 1440 Hijrah Vision Document yesterday.
Abdullah said the NAP would benefit all Malaysians as well as the automotive industry, as it would make the sector more dynamic.
He said the present management of Proton had told him it had no problem with the NAP, and the company was ready to take up the challenge.

Who is planning to buy New car?
Maybe you all should wait for a couple of months to see the price wars soon.
Good luck happy waiting!

Update Proton cars price list:
RM1000 to RM3000 discount given.

Discount -4% (Around RM300 to RM400)

-5.6% to 11%


Mercedes Benz:
CKD only -6.5% to 10%

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