Cheaper Honda cars post-GST

KUALA LUMPUR: Honda Malaysia Sdn Bhd said post goods & services tax (GST) this April, all of its complete knock down vehicle models will have a slight price reduction, ranging from RM500 to RM2,500 depending on the model and variant.
“The price reduction is due to the difference in features and accessories during the tax calculation. The main difference in the tax calculation is the taxable base between GST and sales and services tax (SST),” its managing director & CEO Yoichiro Ueno told reporters at the group’s media gathering 2015 yesterday.
He said the sales tax of 10% tax rate is based on the ex-distributor value of the car which does not include dealer margins, transportation cost and handling fees, accessories and other miscellaneous distribution costs, while GST will be charged on the final selling price of the car.
He noted that although there is a difference of 4% in the tax rate, the impact to the car price varies due to the difference of the taxable base.
“The current SST is only applied once at the manufacturer’s level. Meanwhile, GST will be imposed at each level of a supply chain, from a manufacturer up to a consumer. Each level in the supply chain will add 6% GST, but the contributed tax in the former level will be deducted by the entity at the next level,” he said.
He said the price of its spare parts will also be reduced by an average 3.7% for all models, noting GST will be newly added to labor charge.
However, due to the reduction of the spare parts price, the group estimate that the total maintenance cost will be reduced by 2% to 4% depending on the model.
Meanwhile, he said for complete built unit (CBU) model, which is Odyssey, the price will increase slightly from RM500 to RM1,000.
"We hope that the market would stabilize promptly after the introduction of GST. We will also continue to work closely with our suppliers and dealers, and monitor our finance processes to ensure the correct calculation of the GST in order to avoid under-charging or over-charging of the new GST.”
Currently Honda has 75 3S outlets, 4 1S showrooms and 12 BP centers.
"We are committed to open additional 11 3S centers and 5 BP centers by the end of this year. We are also opening new concept Gallery showrooms in Bangsar, Bukit Bintang, Ampang and Penang," he added.