The current potential car buyers are adopting a wait-and-see stance towards the end of this year as they are still unclear about how the implementation of the goods and services tax (GST) in 2015 would affect them.
Frost & Sullivan Asia Pacific automotive practice associate director Dushyant Sinha said customers were likely to adopt a cautious approach, closer to the GST implementation, hoping for reduction in car prices.
“However, towards the year-end, we expect aggressive sales campaigns from original equipment manufacturers (OEMs) to push sales further.
“This should stimulate demand. As such, we do not expect any major impact on prices due to the implementation of GST,” he told StarBiz.
Malaysian Automotive Institute chief executive officer Madani Sahari, meanwhile, said the public still needed more clarity on the GST.
“People still don’t quite understand how it will impact them. But I don’t think there will be one (an impact) as I think it will help to reduce car prices,” he said.
The sales and services tax will be abolished on April 1, 2015 and replaced with the GST, which has been set at 6%.
An analyst also agreed some potential customers might adopt a “wait-and-see approach,” but believed that it would not increase car prices.
“The GST, which will replace the 10% sales tax next year, is set at 6% and should reduce car prices,” he said.
Under the National Automotive Policy 2014, which was announced in January, the excise duty exemption was only given to locally-assembled hybrid and electric cars. The exemption for hybrids will end on Dec 31, 2015 and for electric cars on Dec 31, 2017.