GST Part II

Despite the announcement by both, the Prime Minister Tun Mahathir and newly appointed Finance Minster YB Lim Guan Eng that the GST will be replaced back with SST, there is still no conclusive timing when it will happen. No doubt, the uncertainty over the introduction of SST will continue to haunt the OEMs for now.

The question on how the SST will be implemented and how it will effect the pricing of cars remains unanswered. Surely, manufacturers will work on their own campaign strategy  moving forward. For now, the vacuum created by the move to zero rate the GST will certainly act as the much needed booster to improve the automotive market condition.

The "Tax Holiday" effective from 1st June until the unspecific date will make the car prices lower by 6 percent. This is for sure. Demand for cars is expected to grow drastically (relative to the last few months), especially during 1st half of June in conjunction with Raya sales buying pattern. Hopefully, the RM0 GST  will continue  to push for higher sales after Raya and continue in July sales as well. Typically, July (specifically post Raya) is a very quiet month due to high public spending in preparation for Hari Raya celebration before that.

Another interesting announcement made by the new government is on PTPTN. It was said that now  PTPTN borrowers earning less than RM4,000 a month can differ the payment until certain period and released from any restriction. Meaning, they now can apply for the Hire Purchase facility to buy car and will be treated without prejudice of PTPTN status. This is a very positive move to enable for the return of more  First Time Buyers (FTB) into the market. In the past  few years, PTPTN defaulters were blacklisted in many things, including (as a result of the Prudent Lending Guidelines imposed by BNM) from getting the Hire Purchase loan to buy cars. Now (according to the news), they can.

The combination of the three factors, the "Tax Holiday", "PTPTN" and the "Raya Buying Mood" will definitely make June an exciting month for the automotive industry.

Meantime, many OEMs have comes forward to announce the rebate on GST prior to 1st June. This was done to protect the market from further drop in May. Customers now have the option to enjoy lower prices earlier than the Zero Rated GST implementation. But why must they buy now as it is only a week to go before 1st June?

The answers are:

1. Under the rebate scheme, the HP is still approved with GST amount. The GST still need to be paid to the  government. The manufacturers will rebate the amount to the buyer.
2. The rebate amount can be used to cover for the downpayment for car or ease the loan re-payment for few first months, or keep it in the pocket (for Raya spending perhaps?).
3. It is in-fact a huge discount like never before
4. All the above will no longer apply from 1st June onwards as there is no GST anymore. It is a direct price down.

For me, the option is yours. Either way, you get to buy car at lower price now, one is with opportunity to recover some cash from the spending and the other one is you will spend a bit less.

GST oh GST

Last week, as Pakatan Harapan took over Putrajaya after winning the GE14, Malaysians started to “wait and see” on how and when they are going to make good of their promises in the election manisfesto. One of it is to abolish the GST.

The business at most car showrooms almost stalled as customers are expecting OTR to be reduced as a result of the abolishment of GST. In anticipating the GST to be replaced with the previous SST, most OEMs issued statements potraying the the OTR will increase.  Current GST is at 6 percent while the old SST was 10 percent.

The announcements were made to encourage customers to return and to resume their purchase and forget about “wait and see” attitude.

On 17^th May, the Ministry of Finance (MOF) issued an official statement saying that the GST will be zero rated from 1^st June 2018. This is indeed a good news, both for sellers and buyers. All the earlier statements by OEMs are now obsoletes as government is silent about the SST. The OTR will definitely be cheaper in the absent of the 6 percent GST. But, the not so good about the announcement was, the effective date of the zero rated GST will be on 1^st June, and the statement was made on 17^th May. That is another 13 days to go. What will happen to May’s business result then?

On the following day, MOF issued another statement that the GST will definitely be replaced with SST, but short of saying when and how much. OEMs are in panic state on how to manage business in May. Proton was quick to announce that they will offer rebate on  GST amount with service voucher for purchases made from 18^th up to end of May (later this was amended to include option for total cash rebate as well). Other OEMs started to publish new prices from June onwards (without GST).

Perodua too, has issued a statement about the impact on OTR with the reinstatement of SST earlier on. This, was later superseded with a new announcement of Instant GST Rebate less than 24 hours after the first statement. The new offer will see Perodua subsidizing the GST amount (on average, about RM2500 per car) to all registration done from 18th up to 31^st May 2018. This is a very costly exercise to Perodua but just like other OEMs, it has to be done in order to spur the business back in May. Otherwise, many of Perodua dealers will suffer from stalled business, lots of accounts will be aging and stocks will be piling up to wait for the return of customers from 1^st June onward. These 2 weeks gap, if not properly handled, can lead to much bigger problem to the eco-system later.

As we speak, customers don’t have to wait until June to buy Perodua cars, as they will enjoy the same benefit and no need to worry about the 6 percent GST. But, even if they cannot take delivery this month, they still have June to enjoy (or until the reinstatement of SST, which have yet to be announced by the government).

For me, this is the moment that we have been waiting for. It is the rare Tax Holiday. Zero tax. The car prices are at its lowest level (to some brands who are offering the GST rebate now) and will continue to be at that level until the SST is reintroduced later.

Perodua Myvi - The Vehicle of the Year (VOTY) 2018

Merely 5 months after it was launched, with almost 40,000 units already on the road and 70,000 units booking collected thus far, the all new Perodua Myvi was crowned as the Vehicle of the Year (VOTY) 2018 by DSF.com Allianz last Friday. This is indeed a huge recognition for the new baby on the block. 

According to Mr Danniel Fernandez, the owner of DSF.com, the VOTY Award was not necessarily to be accorded only to a premium or expensive car but to the car that is visible and sighted and driven everywhere and by everybody in the country; be it in the cities, malls, pasar-pasar malam, in the kampong-kampong,schools, offices. You just name the place, you will see this car. That is what it meant in considering the Vehicle of the Year Award.

This is none other than the new Myvi, a truly Malaysian car for Malaysians. Driven by all walks of Malaysians. Appreciates by all genders, races and societies.

With 30,000 more outstanding bookings to be delivered, the waiting period for Myvi now ranges from 1 to 10 weeks depending on variant and color. Overwhelming demand on its high end 1.5 AV variant has now extended to 1.5 H variant. Also, demand for 1.3L model has started to pick-up with longer waiting period for 1.5L. As an insight, as of last Friday (this will change accordingly), the official waiting period for the new Myvi variants/colors are:

The new Myvi is currently the best-seller car in Malaysia, holding a share of 18 percents of the total market until end of April, 2018. 

For me, 1 am blessed and thankful for all the supports given by all. Congratulation Peroduans.