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This article first appeared in The Edge Financial Daily on May 23, 2018

KUALA LUMPUR: Local and foreign carmakers are throwing in an immediate cash rebate of between RM1,000 and RM23,000 for a brand new car, as they trim the on-the-road (OTR) prices ahead of the zero-rated goods and services tax (GST), to be implemented in June.

The carmakers are also offering discounts averaging 6%, the same amount as the current GST rate. The discounts, depending on brands, models and variants, are extended beyond the showroom to include service centres, and applicable for parts and labour charges.

An initial calculation reveals the discounts and the revised prices could result in consumers saving around 6% to 12%.

The auto manufacturers embarking on this promotional trail include national carmaker Proton Holdings Bhd, Edaran Tan Chong Motor Sdn Bhd (ETCM) distributing Nissan cars, and Volvo Car Malaysia Sdn Bhd.

The Malaysian Automotive Association (MAA) said the automakers’ decision to revise and mark down the OTR prices is seen to be in line with the 14th general election pledges of the new federal government, promising to abolish the unpopular GST within 100 days of assuming power.

“This is the trend we are seeing in the shorter period. Many carmakers are doing the promotion to entice buyers, which will spur the growth of vehicle sales in the immediate term,” MAA president Datuk Aishah Ahmad told The Edge Financial Daily.

From June, the government has announced the GST rate will drop to 0%, from 6% currently. Following the zero-rated GST, Proton said its customers stand to gain even more as the national carmaker strives to boost its value-for-money proposition, while the nation enjoys a tax holiday with substantial savings on car prices.

“Though the sticker price will remain the same until the date when the GST gets zero-rated, all customers will be offered the choice of an instant cash rebate for cars registered from May 16 to May 31, or service vouchers equivalent in value to the difference between the current and new price of the car, effective June,” Proton said in a media release yesterday.

Proton has revealed it will be offering a GST rebate of between RM1,939.26 and RM2,541.52 for its popular Saga model, translating into savings of 11% to 12%. Following the rebate, a standard 1.3 litre Proton Saga costs RM33,123.87, compared with RM35,320.29 previously.

Proton is also offering a rebate of between RM2,452.70 and RM3,306.27 for the Persona model. Hence, a standard 1.6 litre model is at RM41,681.23, instead of RM44,391.09.

Meanwhile, Edaran Tan Chong said it is offering a cash rebate of around 5% to 6% for new purchases of Nissan passenger vehicles, resulting in savings of between RM4,569.03 and RM9,419.99.

For example, it has marked down the standard 1.5 litre Almera to RM64,639.05, from RM68,500 previously. It also said the standard 1.6 litre Nissan Grand Livina model had been reduced to RM82,194.71, from RM87,100.

“In the event of a new tax structure implementation, on-the-road prices may vary for Nissan vehicles,” the company added.

Volvo said it had reduced prices as well, such as for the Volvo V40 from RM163,888 to RM154,648.93, resulting in a savings of RM9,239.07.

For high-end models such as the XC90 T8 Twin Engine Inscription Plus, Volvo said it had slashed the new selling price to RMRM390,502 from RM413,888, resulting in a staggering savings of RM23,386.

“This revised pricing will take effect starting June 1, 2018 and will remain until further notice or announcement from the ministry of finance,” Volvo added.

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