Published on June 4th, 2022 | by Daniel Sherman Fernandez0
Malaysian Car Prices Rising 1% to 3% Due To GST And More
We cannot avoid car prices rising as everything else is getting more expensive.
Should we all rush out and buy a new car as soon as possible? Should we trade-in our 3 to 4-year-old car which is not giving us any problems (assuming it is not a plug-in hybrid or an electric car with no after sales of manufacturers representative here in Malaysia, like Tesla and Polestar?)
Should we get ourselves into even more debt with a brand new car when our jobs are not that secure and the economy is not in the best of health? Should we take the plunge with a new car just because prices are rising a few percent?
When the government announced the SST discount (as part of the PENJANA plan) a number of Malaysians went out to buy a new car without even needing a new car.
We know this as friends and relatives with current nearly new cars were ready to trade-in for a new car just because there was a SST exemption which brought car prices down by about 4 to 7 percent or so.
Meanwhile, the amount of depreciation they lost on their ‘not so old’ trade in vehicles was not taken into consideration and new online used car ‘players’ like MyTukar and Carsome benefited from the flurry of used car trade-ins.
Sellers just wanted a used car valuation that meant no money out of pocket and a quick new car ownership.
It worked very well and used car sales surged as new car sales surged. Malaysians were spending and not ‘thinking’ much about the years ahead.
Then the SST timeline was coming up and the rush to get new cars was stalled as new car deliveries were slowing down due to chip shortages and supply chain issues from Europe, Japan and also China.
Then there was an extension to the SST timeline to 31st December 2021. Excitement again in the car industry and dealers were now refusing to provide discounts or free gifts as Malaysians wanted new cars, no matter what. Even slow moving brands were seeing stocks running out.
It was a good time to be a new and even reconditioned car sales person. Now comes news from the analysts from AmInvestment Bank Berhad that with the re-implementation of GST (which was removed back in 2018) the new car prices will be moving up 1% to 3%.
You do not need an analyst to tell you this. This is common sense as with the rising costs of food and services in the past few months in Malaysia and with our Ringgit losing some ground against the US Dollar, anything imported will rise in value.
We are sure car prices will be rising by 5% to 8% in coming months when new models are launched in Malaysia and new 2023 stock gets delivered as logistic and material costs have also risen.
Meanwhile, new tire prices have risen already and engine oil prices have also moved up recently.