With continued high demand, Proton reports that its total sales volume increased again for the month of April, the third consecutive month of growth. 15,017 units (including exports) were delivered, and the company’s cumulative volume after the first 4 months of 2021 reached 47,843 units. This is more than double the number for the same period last year although it has to be remembered that the MCO (Movement Control Order) shut down business activities for the whole industry for a while.
By its own estimate, Proton’s latest figure means it has a market share of 26.7% for April, and it continues to strengthen its hold in second position in overall the sales rankings table with a market share to date estimated at 24.4%.
Proton Saga at the top
The company believes its Saga is at the top of the national sales chart with 5,472 units sold in April while its two SUV models continue to set strong sales numbers. The X50, which has a long waiting list, set yet another new high for deliveries with 3,583 customers receiving their vehicles in April. The X70 was dominant in the C-segment SUV category with 2,101 units delivered.
Proton’s other 3 models also performed well and had their best months of 2021. Despite strong competition in the B-segment sedan market, 2,266 units of the Persona were sold, while the Exora continued to rule the C-segment MPV class. Iriz sales received a boost from strong demand for the R3 Limited Edition model that allowed it to have its best sales month since 2019.
Iriz R3 Limited Edition
Good month for the industry
“April was a good month for the automotive industry and aside from Proton, several other brands also had their best month of the year so far. The Total Industry Volume is estimated to be over 56,000 units as all brands are trying to fulfil sales orders before the expiry of the PENJANA sales tax exemption at the end of June 2021,” said Roslan Abdullah, CEO of Proton Edar, the company’s sales arm.
“For Proton, we are continuing with efforts to meet the strong demand for our products while maintaining a high level of product quality. At the same time, we are focussing on improving customer service and addressing issues related to spare parts availability, which is vital as our sales volume increases. We expect the situation will see significant improvement as the year progresses but we are working hard to move up that timeline,” he said.
He added that Proton Edar is looking forward to increased production volumes with the new stamping plant, which is now under construction. “The benefits of improved production volumes, lower costs and increased quality will allow us to increase sales exponentially both domestically and abroad, which will drive the company towards achieving its stated long-term goals,” he said.
Proton’s resurgence continued into 2021 with strong monthly sales for the first three months, with March recording the highest volume of 14,989 units (including exports). It was 26.2% higher than the February numbers, which is estimated at 23.5% share of the market, and this volume was also the best sales month since September 2013.
Maintaining its second position on the sales chart, Proton’s cumulative sales for the first quarter (Q1) of the year totalled 32,826 units, giving the brand its highest quarterly market share figure since March 2012.
The top-selling model in March was the Saga with 5,589 units delivered, an increase of 32.5% compared to February. The Persona, Iriz and Exora also posted their best figures for the year with the MPV being the leader in C-segment MPV sales.
SUV sales keep growing
SUV sales continued to grow and more vehicles could be delivered as the new production line at the Tanjung Malim factory enabled higher output. In total, 3,513 units of the X50 were delivered to customers while the X70 saw a month-on-month increase of 58.4% to 2,337 units. When combined, Proton set another internal record with 5,850 SUVs delivered, beating the previous record of 4,820 units that was set in February.
“After a soft start to the year, Malaysia’s automotive industry has finally hit its stride for 2021. We estimate Total Industry Volume to be over 63,000 units, suggesting all brands will post their best numbers for the year to date. For Proton, March was a very good sales month as we achieved our highest figure in 90 months but our sense of achievement is tempered by the fact that it could have been even better if we were able to produce more units,” said Roslan Abdullah, CEO of Proton Edar.
“As things stand, we still have a large order bank to fulfil so over the next few months, Proton will strive to increase production while maintaining our focus on delivering high quality products. We are also mindful that the PENJANA incentives are currently due to expire by the end June, so we aim to ensure as many customers as possible are able to enjoy the tax holiday given by the government,” he added.
New production line at the Tanjung Malim factory has increased output of vehicles.
More loan disbursements
“While the increase in unit sales of Proton vehicles has been our main focus, it is important to acknowledge the growth in loan disbursements by Proton Commerce Sdn Bhd, our in-house auto financing subsidiary. This proves we are offering attractive financing packages to our customers and can compete against other players in the automotive finance market,” Encik Roslan said.
Nearly 4,000 loans were disbursed in Q1 2021 with an estimated 1,700 contracted in March alone. The latter figure is equivalent to a 122% growth over February and overall, disbursements for the first quarter of the year are up by 141% over 2020.
“More importantly, customers can enjoy the convenience of purchasing and financing their new Proton from our authorized dealers, making our outlets a one-stop centre for all their Proton needs,” added Encik Roslan.
Although sales in the first month of this year began on a low note with the Total Industry Volume (TIV) of new vehicles registered being 51% lower than the TIV in December, the market gradually improved and most companies had increasing sales in the two months that followed.
Perodua sold an estimated 57,911 vehicles in the first quarter of 2021 (Q1) which was 29% greater than the 44,977 units it sold in the same period last year. Of course, it must also be remembered that March last year was a short business month as the Movement Control Order (MCO) began and no sales activities could be carried out at all.
Month-on-month, Perodua’s registrations jumped by 47.3% to 24,433 units in March 2021 compared to February 2021’s 16,583 units. A big contributor was the new Ativa SUV (below) which was launched in early March, with 4,345 units delivered during the month.
14,574 bookings for Ativa
“March saw a jump in our sales numbers to an estimated 24,433 units, underpinned by strong demand, particularly for the Ativa, which has collected 14,574 bookings since we began order-taking on 19 February,” said Perodua President & CEO, Dato’ Zainal Abidin Ahmad.
“This makes the Perodua Ativa the best-selling compact SUV in the country in the month of March. We are glad that the Perodua Ativa has gotten off to such a strong start, and that we well surpassed our 3,000-unit monthly delivery target in the first month,” he said.
“We thank Malaysians for their support and trust. On our end, we are committed towards timely deliveries of every order made,” Dato’ Zainal said, adding that production has increased not just for this new model but also for all of Perodua’s models.
A shipment of newly built Perodua vehicles on the way to dealers.
Shortage of semiconductor chips
During Q1 2021, Perodua manufactured 60,383 vehicles – 23% more than the 49,280 units produced in the same period in 2020. However, like other carmakers, the company has been facing the challenge of shortage of the semiconductor chips needed for the many electronic systems.
“We are working with our partners to find alternative supply while at the same time monitoring the situation on a daily basis to ensure continued operation of our production lines,” Dato’ Zainal Abidin said. He is confident that, despite the semiconductor issue, Perodua will still be able to meet its initial 2021 sales target of 240,000 units.
The 2021 sales target represents a 9% increase from the 220,163 units sold in 2020, and is expected to lead to a record purchase of RM6.5 billion worth of locally-sourced components this year.
After a slow start to the new year, new vehicle sales jumped 30% in February as the buying mood returned, pushing the Total Industry Volume (TIV) to 42,784 units. Of this number, 4,861 units were commercial vehicles )including pick-up trucks). The segment volume was 30% higher than last year, possibly because a year ago, concerns about the pandemic were growing and businesses would have suspended purchases as a precaution.
The higher TIV was also attributed to the easing of the Movement Control Order in some states, making it possible for customers to go to showrooms if they wished. However, many companies have made a big push towards online marketing and have many processes which replace traditional practices where the customers had to personally come to the showroom.
Launch of the Iriz R3 Limited Edition (pictured) and Saga R3 Limited Edition, as well as Special Editions of the Persona and Exora generated excitement in the market in February.
The backlog of orders for some models also contributed to the increase in new vehicles registered in February. Late last year, sales were brisk and popular models were in short supply and just as when there was the GST-free period some years back, the plants could not ramp up production quickly to meet the sudden rise in demand.
The response from the production side seems to have gained momentum as February output of 45,199 vehicles was a 14% increase compared to January output. And compared to the same month in 2020, the output this year was 12% higher, with commercial vehicles registering a jump of 57%.
For the month of March, it is likely that the TIV will still be climbing, especially if the pandemic situation keeps diminishing in severity and public confidence becomes stronger. March is also the final month for some companies to make the final push to get the best business results for their financial year which ends on March 31.
The appeal of new models being launched will also bring more sales to companies like Perodua which began deliveries of its new Ativa SUV in early March. At the time of writing, we are aware of a couple of other models that will be launched this month too so there should be higher consumer interest which will continue up to the Hari Raya festive period.
Source: Monthly sales reports compiled by the Malaysian Automotive Association (MAA). The Total Industry Volumes shown for the month may be incomplete as some companies are unwilling to provide their sales data.
♦ New vehicle sales in the first month of the year were 32,829 units, 51% lower than for December 2020, and 24% lower than the same month in 2020.
♦ The decline was due to a few factors, among them the surge in purchases in December by those who did not want to miss out on the sales tax exemption. It was originally set to expire on December 31, 2020 but at the last moment, the government decided to allow an extension until June 30, 2021.
♦ The large number of sales in December would have exhausted the order bank for the following month on the one hand, and companies also ran low on stocks due to the high demand at the end of the year. For a change, some customers did not choose to defer their delivery date to the new year.
♦ Difficulties in deliveries due to dealers being unable to get stocks also kept the Total Industry Volume (TIV) down. The disruption caused by the ongoing MCO affected some suppliers of parts or systems and without just one item, a car cannot be completed at the assembly plant.
♦ January sales were also impacted by the restrictions of the MCO which limited travel distance to 10 kms from home. However, many companies have established and publicised their ‘online showrooms’ which can at least enable buyers to start the purchase process. Some companies also offer to bring vehicle over for test-drives and even deliver newly registered vehicles to the doorstep using a dedicated transport service.
♦ Sales of new commercial vehicles were higher in January 2021 compared to a year earlier. Almost 4,000 vehicles (including pick-up trucks) were delivered whereas, in January 2020, 3,532 units were delivered.
♦ The MAA expects February sales to be even lower, given the short month and the ongoing MCO which affects businesses in various ways.
Proton is usually the first to provide an overview of their sales for the previous month, and for the first month of the new year, they have reported a drop of 29.9% in sales compared to January 2020. During the month, the carmaker delivered 5,964 units and with its estimate that the Total Industry Volume for the month will be slightly above 32,000 units, that means a market share of 18.5%, about 1% less compared to the same month last year.
Proton points out that the overall figures are a reflection of supply not being able to meet demand rather than a reduction in bookings. Nevertheless, it is clear that there are economic effects on various industries and consumer confidence.
The New Normal at Proton outlets where Standard Operating Procedures are observed by the public and staff.
Second MCO slows down sales
“January was a difficult month for Malaysia’s automotive industry. Hopes were high that the momentum built at the end of 2020 would be carried forward, especially after the announcement of PENJANA incentives remaining available until the end of June this year. Unfortunately, the second MCO (Movement Control Order) announcement put a damper on those hopes,” said Roslan Abdullah, CEO of Proton Edar.
“Still, Proton, as well as the rest of the industry, is in full support of all measures the government has in place to control the rate of infection. The safety of all Malaysians needs to remain as the main priority and companies need to pivot in order to achieve their goals in a changed market environment,” he said.
“Measures like the MCO have naturally affected the number of customers coming to showrooms, but we can receive bookings online helping to boost our sales,” he added.
Bestselling Proton model in the first month of 2021.
The Saga started the year as the bestselling model with 2,583 units delivered. The two SUV models – the X70 and X50 SUV twins saw lower volumes of 892 units and 1,082 units, respectively. To date, 4,809 units of the X50 have been delivered since its launch at the end of October last year.
Effect on production volume
While Proton’s order bank remains healthy with orders carried over from the end of last year, the company is still working hard for supply to catch up to demand. As an industry that depends on a global supply chain, automotive companies are acutely affected by delays to vendors that have a knock-on effect to their production lines.
“However, our supply lines have been disrupted over the last few months by the coronavirus making it difficult to ensure a steady flow of parts needed to build our cars. It’s something all car manufacturers have been facing for the past year but we are hopeful that with the arrival of a vaccine things will stabilise by the middle of the year,” Encik Roslan said.
Product launch plans remain
Despite the delays, Proton intends to pursue its product launch plans for 2021 as the company strives for more sales growth both domestically and abroad. “For now, Proton will stick to its 2021 product launch schedule. We have an exciting series of improved products in the pipeline while the Proton X50 will now be able to establish its standing in the market by benefitting from a full year of sales,” he said.
To know more about promotions at BHPetrol stations, visit www.bhpetrol.com.my.
The severity of the COVID-19 pandemic forced governments to put their countries into lockdown, which meant that industries and businesses had to close. Malaysia didn’t escape the economic downturn that resulted, though good management at the start helped to bring the numbers down and the situation under control. This allowed the country’s economic sector to restart and slowly recover, aided by a recovery program which covered many sectors.
For the Malaysia auto industry in modern times, 2020 was the worst year in its history which goes back to the 1960s when the first local assembly of vehicles began. There had been a few recessions but even though they were challenging with a contraction of the market, there wasn’t a total shutdown as was experienced last year. Activities could still continue and each company had its own strategy to weather the downturn, which veterans knew would pass. And while there was loss of jobs, there wasn’t the fear of death or sickness too.
PENJANA was a big help
The PENJANA program by the government to help the economy recover began in the middle of the year and for the auto industry, the support given was in the form of exemption of the 10% sales tax, reducing the price at point of purchase. It was a straightforward incentive – 100% of the tax for models assembled locally (CKD), 50% for those imported CBU (completed built up).
The incentive worked well as sales quickly rose and stayed above 50,000 units a month during the second half of the year. In fact, the final quarter was exceptionally strong, averaging 61,373 units a month compared to 53,765 units a month for the quarter before.
All data and charts provided by Malaysian Automotive Association.
Consistently high numbers in second half
Nevertheless, the Total Industry Volume (TIV) for 2020 was expected to be lower than the 604,281 units recorded in 2019 and in the first half of the year, many would have expected it to be significantly lower. However, with the consistently high numbers in the second half of the year, the TIV closed at 529,434 units, 12% lower than 2019 but well past the forecast of 470,000 made by the Malaysian Automotive Association (MAA).
However, when the year had started, the MAA had actually forecast 607,000 units for the year, but revised it substantially downwards by 23% as the seriousness of the pandemic and its impact on the industry became clear.
The monthly TIV reached its peak in December 2020 when a total of 68,836 units were registered. The exceptional high TIV in December 2020 was due to consumers buying forward in anticipation that the tax exemption incentive (only for passenger vehicles) expiring on December 31, 2020, as original announced. However, it has been extended to June 30,2021.
“MAA would like to express our heartfelt and sincere appreciations to the government in general and the Ministry of Finance and Ministry of International Trade & Industry in particular for listening to the industry’s plights and providing us with all the supports (especially the PENJANA package incentive) to ensure the continuance of business activities and the survival of the industry,” said Datuk Aishah Ahmad, President of the MAA.
By segment, passenger vehicles (excluding pick-ups) declined by 12.6%, which was higher than for commercial vehicles (including pick-ups) which declined by 10.4% Production of new vehicles in 2020 seemed to be impacted by the forced shutdown of every factory in the country for about 2 months but when allowed to resume operations, the carmakers worked harder to meet not only outstanding orders (for high-volume brands like Perodua and Proton) but also increasing demand in the second half of the year. By year-end, the production volume was 15% lower than the output in 2019.
Total Production Volumes in 2020 and 2019.
Looking ahead
As always, the MAA takes feedback from its members and also factors in economic and environmental situations when looking ahead. It is optimistic that 2021 will see the local economy recovering in tandem with the global economy, which can boost sales. Certainly, the continuation of the sales tax exemption will help, along with more consumer confidence to spend on items like new vehicles.
Lower hire purchase (H-P) interest rates will also help, complemented by the introduction of new models which the companies will be offering at prices that will be ‘in tune’ with the times. While the industry may have come to a standstill in one sense, activities continued behind the scenes and whatever projects were underway would have only been slightly delayed.
So, for 2021, the MAA is forecasting an increase of 100,000 units from its 2020 forecast, which is 8% higher than the actual TIV achieved. Strong growth (18%) is expected in the commercial vehicle segment which will continue to require vehicles for the various projects underway around the country.
Looking further ahead, it appears that the MAA expects the strong demand to continue into 2022 with an increase of 6% to take the TIV past 600,000 units again. Thereafter, from 2023 – 2025, growth will be at a slower rate of 3% to 3.2% annually. Hopefully, the pandemic will have diminished significantly and normalcy has returned.
Trends in car ownership are evolving and these days, there is growing interest in what are known as subscription plans. Customers choose a model, and a fixed instalment is paid each month over an agreed period of a few years. The amount includes maintenance costs, insurance and even roadtax so it is convenient.
But there is a catch: ownership of the car is not the customer’s at the end and he or she can either return it or negotiate to buy it over, or even start a new subscription. It’s a good opportunity to upgrade to a new car every few years, and no hassles of having to sell off the old one first.
First in the world
A number of companies in Malaysia offer this approach and the latest to join is Toyota with its KINTO ONE scheme. Introduced by Toyota Capital Malaysia, KINTO ONE is a global financing scheme which the carmaker has introduced in many countries, and it already has a very big presence in the Europe. For Malaysia, it is the first-in-the-world Islamic based car medium-term subscription program.
Originating from the Japanese word kinto-un, which means ‘flying nimbus’, as the future image of mobility, the name is in line with the spirit of providing services that quickly appear when necessary, enabling mobility as per the user’s wishes, and are kind to the environment.
All-inclusive instalment
Unlike the traditional hire purchase (H-P) financing facility, KINTO ONE is an all-inclusive, fixed monthly payment, car subscription plan. The fixed subscription covers registration costs of the vehicle, annual comprehensive insurance coverage and roadtax, as well as scheduled maintenance and preventive maintenance costs. At the end of the term, which can be 2 years or 3 years, the customer can return the car.
Some of the Toyota and Lexus models available under the KINTO ONE plan. The monthly amounts may appear high but remember that they include costs like roadtax, insurance and servicing – which you would have to pay anyway. So all an owner really has to pay for is fuel, paking and toll charges – and fines.
“KINTO ONE is the direct translation of a strategic partnership between Toyota Capital Malaysia and UMW Toyota Motor and is a distinctly curated response to the new generation lifestyle seeking mobility. It is about the shift of consumer behaviour from car ownership to car usership. It is about Toyota’s vision of ‘Mobility for All’,” said Thomas Chai, President of Toyota Capital Malaysia.
Good for corporate sector
Mr. Chai added that KINTO ONE is also aimed at the corporate sector which wants to be ‘light in their assets’ but still require the functionalities of being mobile. The full range of aftersales and support services will be handled by authorized Toyota dealers nationwide, with 24-hour emergency assistance also provided.
“It all seems new and revolutionary for KINTO ONE aiming to cater to the newer generation of car owners seeking for freedom and mobility through its all-inclusive fixed monthly subscription plan, but KINTO ONE has already been introduced in many parts of the world. While it is newly launched here in Malaysia, we are starting with our learning curves way past the introductory stages. With strong support from Toyota Motor Corporation and the abundant availability of intellectual discourses amongst KINTO operators around the world, it has made our market introduction journey a very enriching one,” said Ravindran Kurusamy, President of UMW Toyota Motor.
KINTO ONE is exclusively available online via the website (www.kinto-my.com) where customers can view the car models available, decide on which subscription plan suits them and then apply online. The subscription plans also cover Lexus models available in Malaysia.
After a year of unprecedented challenges, Proton closed 2020 on a high with another increase in sales, following a previous landmark performance in 2019. Despite losing over 2 months of vehicle production as well as sales due to the MCO (Movement Control Order), the company was still able to sell 109,716 vehicles for the whole of 2020 after a final month of 13,306 units.
The 2020 volume represented an increase of 8.8% over the 100,821 units sold in 2019, and Proton says it is the only major automotive company to record growth in Malaysia. Its market share for the year also increased to an estimated 21.1%, a significant 4.4% increase.
Main drivers of volume growth
The main drivers of volume growth were the extensively updated Persona, Iriz, Exora and Saga, which all posted higher numbers in 2020. The X50 surpassed expectations despite its later than planned arrival. The sales performance, combined with a 49.8% increase in export volume, allowed Proton to buck the trend of the Malaysian automotive industry which is expected to contract by an estimated 13%.
In terms of individual performance, each Proton model ended the year near the top of their respective segments. The Saga remains as the company’s bestseller for 2020, while the launch of the X50 and continued strong sales for the X70 combined to make Proton the leading SUV brand in the country.
Sales of X50 and continued high demand for X70 makes Proton to leading SUV brand in Malaysia.
“We are grateful to have achieved this level of performance against the backdrop of 2020. To describe it as challenging would be an understatement but we persevered. Our results were backed by many factors, trust from our customers, support from the government, commitment from vendors, resilience of our dealers and also the diligence of our staff,” said Dr. Li Chunrong, CEO of Proton.
Strategic management and decision-making
COVID-19 brought economic activity to a complete halt and its adverse effects required quick, prudent and tough management decisions. Fortunately, with the last few years of vigilant cost control and improved efficiencies, the company was able to react quickly to the crisis. This meant that despite the shutdown, there were no layoffs or salary cuts. More importantly, constant monitoring and agility allowed the company to ramp up production very quickly after the lockdown.
Post-lockdown, Proton was rigorous about safety for both customers and employees. Stringent protocols were deployed and are still being followed to ensure that all customers, partners and employees can interact with peace of mind.
Still, like all other industries dependent on a global supply chain for components, the company was affected by the availability of parts for producing new cars and replenishing its spares. This caused delays that, in some instances, severely increased waiting times for both sales and service customers. However, steps have been taken to address these issues and a marked improvement in the coming year is promised though, in the short term, some delays will persist.
Continued push in manufacturing and quality
A key component in Proton’s performance for 2020 was the results of its investments in manufacturing and quality. This was both in the areas of hardware and software. Aside from technology, new processes and systems were introduced to drive an increase in capacity and precision. This was exemplified not only with the increased volume but with the smooth introduction of the X50 at the company’s new production line at the Tanjung Malim factory in Perak, which also makes the Persona, Iris and X70.
Proton also reports that it markedly improved its Global Customer Product Audit (GCPA) score demonstrating that its quality initiatives are coming to fruition. The company was able to do this despite manufacturing being the most severely impacted by the pandemic.
Export growth in trying times
Despite the restrictions placed on the global movement of goods, 2020 saw a strong year for the company’s export division, with a bumper month in December. The first locally assembled Saga roll-off the assembly line in Kenya and the model also made its debut alongside the X70 in Pakistan. Both models are currently imported in CBU form from Malaysia but will soon be assembled in Karachi when the new assembly plant is completed later this year.
The X50 meanwhile entered its first export market when it made its international debut in Brunei last month. It is the fourth Proton model to be launched in the kingdom in 2020 after the latest Persona, Iriz and Saga.
Raising the retail game
Proton increased its footprint nationwide with another 20 3S/4S outlets, bringing its network size to 140 by the end of 2020. The company continued its programme of upgrading to make a difference in the entire customer value-chain. In striving to deliver a premium brand experience, it paid special focus to revamping the back-end of the business, especially in the areas of after-sales and parts.
While already showing results, these efforts are part of Proton’s plan for the long-term evolution of its business. As such, 2020 also saw Proton change from a retail sales model to a wholesale one with the transfer of ownership of 49 of its branches. This allows the company to focus more on product development, product quality, after sales service and exports while opening the door for dealers to expand the envelope of customer service.
Proton also did its part in helping in the war against COVID-19, providing frontliners with protective equipment made at Proton’s factory, and also vehicles for government agencies to use.
“2020 was a real test of Proton’s mettle as we had only just begun our new trajectory. The nature of this pandemic for an organization like ours, which depends on global supply chains, put great strain on the business. However, a combination of good strategy and hard work has left us not only with an increase in sales against a decreasing market but a renewed belief in our product strategy, quality and commitment to our customers,” Dr.Li said.
“At the same time, we also saw to it that we did our part for the country, which all of us at Proton are especially proud of. We will continue to put the pedal to the metal in 2021 and strive to improve all aspects of the business,” he added,
This has been a year of a lot of bad news, some even tragic. But in between the bad news, there have been times when good news has come through like rays of sun piercing through dark clouds. For the auto industry, things looked grim in the first half of the year when shutdowns collapsed the market for a month. Then when the government started to plan for recovery, help came in the form of exemption of sales tax until the end the year.
This incentive must have made a difference as sales have been high over the past 5 months while people wanted to use the opportunity to save money on their purchase. As always, being able to sell cars at lower prices helps, and the companies hoped that they would get the exemption period extended into 2021. The Finance Ministry at first said no, and despite it being a time when many go on leave, some had to prepare new pricelists with the sales tax included again.
Finance Ministry changes its mind
Then, for reasons unknown, the Finance Ministry changed its mind and like the ray of sunshine in June, there was another ray again as it was announced that the exemption would continue until June 30, 2021. Whether it continues to be part of the Penjana stimulus package or is a separate provision is not known.
So for those who were disappointed that they missed the chance to save money because they could not get their loan applications approved in time or stocks were not available, this would be good news. There is no change to the exemption which also includes reconditioned vehicles.
Full exemption for locally-assembled models
Vehicles that are assembled locally will be entitled to the full exemption which is 10%, and those which are imported in CBU (Completed Built-Up) form will have only half the exemption, ie 5%. However, the exemption is not applicable to commercial vehicles and pick-ups.
Some models, like the new Honda City RS e:HEV which is due for delivery only from January 2021, will now be a bit cheaper than what buyers expected.
Generally, this means that the sales tax-exempt prices that have been applied since June will continue unless the company has reason to adjust prices. There may also be some new models that were due for delivery starting in January (eg the new Honda City RS e:HEV and the BMW 530i M Sport Dark Shadow Edition) which will be cheaper without sales tax being included.
It is also learnt that the dreaded revision of Open Market Value (OMV) calculations that was to have been adopted from the start of 2021 would no longer take place. This would have raised prices of new vehicles but now, it seems that Customs has decided not to pursue the matter.
