THE short-term economic recovery plan (Penjana) has helped boost car sales in recent months, said the Malaysian Automotive Association (MMA) and car dealers.

This has seen an increase in the purchase of local cars but buyers are staying away from luxury vehicles at the moment due to the uncertain economic conditions, dealers told The Malaysian Insight.

The government’s decision to exempt sales tax has led to an increase in sales, said MMA president Aishah Ahmad.

“In July, 52,000 cars were sold. The figure increased to 57,000 in August. People are rushing to buy cars at the moment,” she said.

Aishah hopes Putrajaya will prolong the tax exemption but is not confident it would happen.

Prime Minister Muhyiddin Yassin announced a 100% sales tax exemption on locally assembled (CKD) models and 50% on fully imported (CBU) models from June 15 to December 31.

He also announced a host of measures to stimulate the economy, which has been adversely affected by the Covid-19 pandemic.

Honda Malaysia Sdn Bhd spokesman Sunita Prabakaran told The Malaysian Insight that sales have been encouraging since the Penjana plan was imposed.

“Through this initiative, we were able to lower our car prices by up to RM9,502.47.

“The sales tax exemption has definitely been an encouraging factor since we resumed business post the movement-control order (MCO). We have been recording a positive sales momentum and we hope to maintain that,” said Sunita.

There are seven Honda models being assembled in Malaysia. They are Honda Jazz, City, Civic, BR-V, HR-V, CR-V and Accord.

Perodua car dealer Ahmad Fuad Razlan said he did not expect the public to spend on cars during this period.

But despite the worry, he managed to close five car deals last month.

“Given the pandemic and the economic concerns, I have to say I am surprised. Three people bought the latest Axia model and two others bought the new Perodua Aruz.

“For me, that is an achievement. Yes, of course, the Penjana scheme helped salesmen like me,” Fuad said.

Azhar Abdul Hashim shares Fuad’s sentiment. He said he had been relying on the sale of locally assembled cars rather than imported or luxury cars.

“If you see on the road, there are so many Perodua and Proton cars. Also, Honda and Toyota cars which are assembled here. People are buying those types of cars because the price is low now due to the sales tax exemption.

“I cannot rely on the sale of expensive cars to make ends meet,” said the dealer with 20 years’ experience.

Another dealer, who wishes to be known as Rahman, said national cars, such as Proton and Perodua, are in demand.

“The designs are nice, the technology matches those of imported cars. Keyless system, ABS system, spacious and comes in good colours.

“I had six people who wanted to buy the new Myvi and Axia. Three managed to get the loans. While the other three could not.

“It shows the people are in the market because of the price,” Rahman said.

Meanwhile, Universiti Malaya’s Prof Dr Nazari Ismail advised the public not to splurge on cars simply because they are cheap.

“Yes, the sales tax exemption has lowered the car price but consumers must be smart. If your car is still in good condition, there is no need to buy a new car just because it is cheap.

“Things can get worse and if it does get worse, we will all be in trouble. We do not want to be in debt,” said Nazari from the business and accountancy faculty. – October 2, 2020.