BUYERS of reconditioned vehicles may soon have to fork out more for popular models like the Toyota Alphard, Vellfire, Harrier and Estima as well as Mercedes-Benz and Audi models.
Malaysia imports tens of thousands of reconditioned cars each year. In 2015, it was reported that Malaysia brought in more than RM1.9 billion worth of reconditioned cars from Japan, making it the second-biggest importer in the world.
But the government may be gradually putting an end to this.
Industry players claim that the cost of importing reconditioned vehicles has increased by as much as RM5,000 this month alone.
Sources familiar with the Malaysian reconditioned car industry said the hike was mainly due to new excise duty rates by the Customs Department that had come into effect.
“So, if recon car players were to import vehicles this month, these vehicles would be under the new (excise duty) rates. In fact, the duties were increased on March 1 for up to 80 per cent of the items available on the Customs’ declaration list,” a source told Cars Bikes and Trucks (CBT).
Another source said Pengimpot & Peniaga Kenderaan Melayu Malaysia (PEKEMA) members were also in talks with the Finance Ministry and Customs on the possibility of using the old rates.
“We have no choice but to increase the recon car price as the duties have risen,” said the source.
One industry player questioned why the government was zeroing in on automotive approved permit (AP) holders. “Why are the car AP holders being questioned? There are others in less risky businesses who enjoy AP benefits but nobody questions them,” he claimed. He added that the perception that AP holders had an easy business and were wealthy was outdated.
“Today, AP holders are monitored for performance and many permits are terminated for non-performance,” said the source.
The performance-based approach had completely changed the playing field for AP holders and made it more competitive and efficient, he added.
The price revisions may have an impact on car sales this year.
According to the Malaysian Automotive Association (MAA), the total industry volume for new car sales in the country is expected to hit 600,000 this year, representing a 0.21 per cent growth against the 598,714 units recorded last year. The industry grew 9.52 per cent last year.
A International Trade and Industry Ministry spokesperson did not immediately respond to CBT’S queries regarding the change in policy when contacted.