The president of the Malaysian Automotive Association (MAA), Datuk Aishah Ahmad has said that the prices of vehicles may soon go up, following an increase in the costs that are being shouldered by manufacturers.

“Rising raw material prices, logistic costs, and the ringgit’s weakening are among the reasons manufacturers may have to increase vehicle prices. However, this has not been decided yet,” said Datuk Aishah, adding that local vehicle manufacturers are still deliberating over whether they should continue to absorb the rising costs.

Additionally, Datuk Aishah shared that the upcoming expiry of the sales and service tax (SST) exemption may also worsen the situation. The ongoing SST exemption – which sees locally assembled (CKD) cars and fully imported (CBU) cars getting 100% and 50% SST exemption, respectively – is set to end in June 2022.

The MAA has appealed to the Ministry of Finance (MoF) to extend this SST exemption until end of 2022, but has yet to hear back from the ministry. “If the SST exemption that is expiring at the end of June is not continued, it will worsen the situation and increase vehicle prices if manufacturers decide to increase the price of their products,” said Datuk Aishah.

Meanwhile, the deputy chief executive officer of Proton Holdings Bhd, Roslan Abdullah commented that the national automotive company is still striving to maintain the current price of its vehicles by absorbing the increased costs. However, some of these expenses may soon have to be transferred over to the customers if the situation continues to deteriorate.

Aside from this possible hike in vehicle prices caused by an increase in costs, the MAA had previously also cautioned that the prices of CKD cars may increase by 8% to 20% in 2023. This is due to the possible implementation of the updated open market value (OMV) excise duty calculation method, which covers a wider scope of expenses compared to the existing calculation method.

(Sources: Free Malaysia Today, Lowyat.NET)

• TAGS:
• Cars
• Datuk Aishah Ahmad
• Malaysian Automotive Association (MAA)
• Proton Holdings
• Roslan Abdullah
• Sales and Service Tax
• SST
• SST Exemption