The new Pakatan Harapan government’s promised abolishment of the 6% goods and services tax (GST) may not bring a reduction of car prices that some people are hoping for. During the launch of the new Nissan Serena S-Hybrid, Edaran Tan Chong Motor’s sales and marketing director Christopher Tan told the media that prices of Nissan vehicles might actually go up slightly if the previous 10% sales tax is reinstated.

“Almost every brand, when we migrated from sales tax to GST, their prices actually came down a little bit,” he said. “So if the situation is such that if the sales tax implemented will be exactly the same as before, there could actually be a price increase. What I can say for now is that perhaps now is the best time to buy, because if that happens you could be paying a slightly higher price in the future.”

Tan added that ETCM will have a price protection scheme, similar to what Motor Image has announced for Subaru vehicles. Under such a programme, customers who purchased their cars starting this month will get the difference refunded to them should prices go down with the move from GST to the new sales and service tax (SST), although exactly what form the refund will take has yet to be decided.

The application of the old sales tax (left) on a car, versus the current goods and services tax (GST, right)

“However, of course, if at a later time the prices of cars are higher, then people who recently bought [their cars] got a good deal,” he said, adding that he is confident that the new government has the consumer’s best interest at heart, and that there will be a “positive price situation.”

The Price Protection Scheme introduced for Subaru vehicles promises to maintain prices at current levels for vehicles purchased from now until August 18. Should prices be reduced when SST is implemented, Motor Image will refund the difference in the form of a service voucher of an equivalent amount, or adjust the price for vehicles that have been booked but have yet to be registered.

Read our in-depth article on GST and its impact on Malaysia’s automotive industry, with views from customs department director-general Datuk Subromaniam Tholasy and Malaysian Automotive Association president Datuk Aishah Ahmad.