Proton to absorb SST in September

This article first appeared in The Edge Financial Daily, on September 4, 2018.
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KUALA LUMPUR: National car company Proton Holdings Bhd will absorb the sales and services tax (SST) charge for all Proton models in September, ensuring that buyers can still benefit from the tax-free prices.

On the same day, second national car company Perusahaan Otomobil Kedua Sdn Bhd (Perodua) announced that a selected number of its models are cheaper under the new SST, which kicked in on Sept 1, compared to the now-repealed goods and services tax (GST).

In a statement yesterday, Abdul Rashid Musa, the chief executive officer of Proton’s distribution arm, Proton Edar Sdn Bhd, said the move to absorb the SST will give buyers additional time to make a purchase. “This will benefit them during this transitional period and help Proton maintain the sales momentum it has recently built,” he said.

Proton is 50.1%-owned by DRB-Hicom Bhd and 49.9% by China’s Zhejiang Geely Holding Group Co Ltd.

Proton also announced that its August sales hit a new monthly high for the third consecutive month. Sales grew by 11.7% from July, making August the strongest month in terms of sales for Proton cars over the last 36 months. In total, 9,501 cars were sold, marking not only a new record for the year, but also the highest sales volume since July 2015.

In line with the higher sales, Proton projected a third consecutive month of growth in market share, with an estimated 15.4% share of total industry volume expected for August. Actual percentages can only be confirmed after the official numbers are published by the Malaysian Automotive Association .

Among the models, Proton Saga and Persona remained popular with car buyers as they continued to lead sales of the company. Saga broke the 4,000 unit threshold with 4,174 registrations, while Persona almost breached the 3,000-unit plateau with 2,957 registrations in August.

“This [record sales in August] was primarily fuelled by the current zero-rated goods and services tax climate prior to the implementation of the SST, as well as our aggressive marketing campaigns that reminded Malaysians to take advantage of this once-in-a-lifetime tax holiday.

“The strong sales numbers show there is an increase in public confidence in the brand as more people are choosing Proton due to the attractive overall package we offer. Our turnaround plan is on track, so the onus is on us to make sure these new customers stay by delivering a high level of customer service,” said Abdul Rashid.

On top of absorbing the SST for all models this month, Proton will be celebrating Merdeka Day and Malaysia Day by offering generous deals for selected models. Discounts ranging from RM500 to RM1,000 will be offered for Saga, Iriz and Persona, while buyers of the recently launched Proton Ertiga Xtra will get a RM2,000 discount.

Meanwhile, Perodua said new pricing for selected models had now been reduced by between 1% and 3%, compared with prices during the GST era.

“Based on the new tax structure, almost all Perodua models see a price reduction, compared to the GST price structure,” said Perodua Sales Sdn Bhd managing director Datuk Dr Zahari Husin in a separate statement.

For January to June this year, Perodua posted record half-year sales of 117,100 cars, which were 17.5% higher than the 99,700 units it sold in the same period last year. Consequently, its market share grew to 40.4% as at end-June.

The strong sales were driven by its four bestselling models: Myvi, Axia, Bezza and Alza. Myvi topped the sales chart with 46,860 cars, followed by Axia (33,870), Bezza (23,555) and Alza (12,815).