Well, not that it’s any surprise, but don’t be expecting cheaper cars in the near future – Bernama reports that a research house has indicated that the government is likely to take some time to implement a plan to reduce car prices in Malaysia.
According to a note issued by JF Apex Securities, the government would need to consider the potential outcome, given that it would dampen Proton’s market share. It added that a feasibility study on the overall impact needed to be carried out so as to avoid disruptions to the automotive ecosystem.
As such, the research house said it didn’t foresee changes in the coming months while waiting for the revised National Automotive Policy to come about.
Seperti dijanjikan, harga kereta akan diturunkan secara berperingkat hingga 2017. InsyaAllah, saya akan pastikan setiap janji ditepati.
— Mohd Najib Tun Razak (@NajibRazak) 28 Mei 2013
In its election campaign, the government had pledged to reduce car prices by 20% to 30%. It had earlier said in 2012 that there were no plans to reduce excise duties, stating that doing so would collapse the used car market and significantly reduce revenue for the government.
The note stated that the second-hand car market would take a hit should the prices be reduced by such via a reduction in excise duties – which make up the largest bulk of a car’s price – of between 75% and 105%.
While such a move would be a boon for first-time buyers, especially in the B-segment, JF Apex said that it would not be the same for existing owners looking to trade-in used cars, what with the drop in second-hand values. It added that the move towards reduction would be through manageable means, saying that the government wouldn’t allow drastic changes overnight, given the implications for the entire industry.