Earlier this week, Proton announced that it will absorb the sales and services tax (SST) for all its cars registered in the month of September. SST started on September 1 after three months of tax holidays, following the abolishment of 6% GST by the Pakatan Harapan government.
Proton said that the move is to maintain its good recent sales performance, which started with 6,173 cars in June. Boosted by the tax holiday, deliveries jumped to 8,012 units in July – that was not just the highest monthly figure in 2018, but also the best month for Proton in the last 30 months. That record was broken in August with 9,501 units, its best in 35 months.
The carmaker is hoping to maintain momentum by absorbing SST in September, which will also see promotions in conjunction with Merdeka Day and Malaysia Day. Discounts from RM500 to RM1,000 will be offered for the Saga, Iriz and Persona; while the recently launched Ertiga Xtra will be offered with RM2,000 off the list price.
That’s good news for bargain hunters. Although the SST price lists revealed so far have largely seen car prices go down compared to 6% GST days despite sales tax set at 10%, the lowest point was during the tax holiday. Unsustainable diversionary tactic? Proton has issued a statement explaining the 0% SST move.
According to Proton, the decision to absorb SST is to “extend the positive feelings car buyers currently have for the brand,” as shown in recent sales results, and also to give consumers more time to make their purchase decision, “removing the element of being rushed to buy a car.”
Happy customers are likely to stay with a brand by returning to outlets and service centres, which in turn ensures their cars stay within the official servicing network, Proton reasons. The company also reckons that customers will be attracted to the fact that what they pay for a Proton goes directly towards the purchase of the car as opposed to tax.
“The strong sales numbers Proton has achieved over the last three months show an increase in public confidence as more people are choosing our cars due to the attractive overall package offered. Our turnaround plan is therefore taking effect so we have to make sure these customers stay by delivering a high level of customer service,” said Proton Edar CEO Abdul Rashid Musa.
“By setting the SST rate to zero for all Proton cars, we are giving buyers the opportunity to enjoy the same tax-free price as enjoyed by our customers over the last three months. This brings a lot of benefit to them when buying a new car and will help Proton maintain the sales momentum it has recently built,” he added.
Proton insists that the financial equation is simple. By selling more cars, the cost of selling, marketing and building each subsequent unit can be spread out, lowering the average cost. By handing these savings back to its customers, the company is investing back in its own brand future, and by doing so it delivers benefits to car buyers as well, Proton says, calling it a win-win result.
Digging deeper, Proton’s lower cost as a national carmaker helps it to absorb SST. Of course, there’s no CBU or CKD pack import duties, and Proton also qualifies for maximum Industrial Linkage Programme (ILP) excise duty exemptions. ILP is designed to encourage local assembly, so using locally sourced parts, in-house parts, locally built engines and conducting R&D work in Malaysia increases the rate of exemption.
Combine all of the above and the final built-up price before SST is applied (during the final transaction to the end user) is lower than CBU or foreign brand CKD cars. Of course, there are other costs (transport, insurance, sales, marketing) and a profit margin that needs to be factored in, and Proton will have to forego some of the latter to cover the tax waiver.
On another note, Proton is busy ramping up its 3S/4S centre network ahead of the introduction of its first SUV, which is based on the Geely Boyue. Just around the corner now.
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We are waiting for SUV…
All waiting with bated breath..
But Proton CEO before told us they only make RM500 clean profit from each car.
If they give this SST discount, Proton will be losing money each car sold
How la?
That ex-CEO also from Perodua
Buyers feel cheated … All rush for nothing
Buyers? But pre-order haven’t even opened yet. What the h…
Tengok Kiri .. kanan… Depan …belakang… Saya satu saja dalam kereta Proton… Yang lain semua Perodua
stupid buyers give few % GST discount all rush like idiots to buy. wait till car companies give 30% discount similar to clothes and electronics , then only i will rush. got money scared what ? scared no car to buy ?
Fuyoo Boyue CBU jimat SST. Syabas P1 !
I have confidence in Boyue because China desgned and engineered the car. So sure good quality
Make loss but still absorb more cost? Apa macam mau untung, bayar soft loan?
Geely made Rm167 BILLION in revenue. Absorbing SST is nothing to P1-Geely.
P1, Geely, Mesidis, VolvoCar, VolvoTrucks, Lotus > all
Why still complain? Now u can afford to upgrade from ur kapcai.
Malu drive proton … Lagi Malu buatan cina
Inilah masalah org Mesia. Tau saja malu beli keta murah tapi ada rumah besar, inikan mau tunjuk lagak ada keta mahal tapi sewa rumah kos rendah. Ada ego xde otak.
True dat, bro joe! P1 is affordable for the masses and chockfull with gadgets and safety system plus superior body shell. Those who can think will buy P1 and save up to buy house/ properties/ investment, while others only shiok sendri buys Jepunis but rents low cost house and eats Maggie everyday.
Eats maggie everyday is good for your health, summore you drive world class jepunis car called vios
Hahaha! Lolz!
make alot more sense, not to have a national carmaker. with better and cheaper brands around while govt still get to rake in cartaxes.
Sales figure kecik miow… ok lah. They can absorb it.
Even proton themselves also dont hav confidence in their car..lol
U mean this? https://paultan.org/2018/07/19/bermaz-auto-says-it-will-absorb-sst-for-mazda-vehicles-booked-before-but-delivered-after-sept-1/
Wow.. hebat campro!
so many good choices in the market for a little higher monthly installment, why a proton? very curious of ppl choice these days?
Maybe because smart people dont want to spend so much on car installment and rather spend more on home installment.
Buy the cheapest car which offer best value for money, not necessarily a Proton…2nd hand car will do. New car got warranty u say…pfffh..
Only idiot buy expensive car but still rent a house.
2nd hand car your mom in law to be dun even look at it
Then yr better off not having these kind of persons to be yr parents in law. Later suffer.
Proton should op for exemption as CKD components are all free-tax. Means there still more imported components that were unable to be exempted? Or their vendor for consultancy plays a big role in their costing? If i’m not wrong, Proton could be the biggest winner in SST regime. Cost could be lower
Still sale no good. They realize their car not laku, so try absorb sst saja la. Mana tau sale jalan.
Kan bagus fikir Macam ni… Patut Dari Awal jual Semua model Murah.. Baru la volume banyak.. At least Kasi cover Kos Bila banyak jual.. Ni harga mahal.. Orang tak Beli.. Lagi la Hanukkah pun Tarak.. Come on proton
Hurry up Proton. At least officially advertise the teaser for the car.
Proton, Geely, Toyota, Kia, Mazda, BMW, Mercedes, Volvo, Lotus > all
ai ya… proton already practicing discount kaw kaw even before tax holiday.
Now they just rebrand discount kaw kaw to absorb SST. Not big change..
How about revamping the utilitarian Peugeot 301 sedan/Citroen C-Elysee and distribute in MY to fight with City/Vios/Almera/Persona instead?
At last, Proton is making an effort to attract customers. It’s no use giving empty talk about how good n how improved Proton cars are when they don’t sell. As more n more people opted for Proton, try your very best to keep n pamper them by providing 1st class after sale service. With better models n quality, Proton might have a chance to survive n prosper.
Absorb??????
Pricing have gone down.
Proton, Geely > all
so making less than RM500 for a Saga is a lie since proton can absorb SST.
Rm500 profit Saga SV no longer on sale since model change di. Pls come to the present and not stay inside cave.
Look at what Chinese hand have turn Proton into. We will wait for further price decrease after existing Proton’s model make their way to China via Geely. Like he said, selling more cars meant spreading the cost to many cars bought.
I really would like to appreciate the amazing kick which Proton got in the month of August with 9,501 units, its best in 35 months.