MAA: Brace yourselves for car prices to go up thanks to weak Ringgit and chips shortage

Though the first quarter of 2022 showed some promising growth in vehicle sales, that might slow down in the coming months as the Malaysian Automotive Association (MAA) has said that vehicle prices are expected to rise.

This is due to an increase in the price of raw materials compounded by the weakening Ringgit as well as the ongoing chip supply shortage. MAA president, Datuk Aishah Ahmad added that this could see an increase in car prices because of the increased costs that will affect manufacturers.

“Rising raw material prices, logistics costs, and the Ringgit’s weakening are among the reasons manufacturers may have to increase vehicle prices,” she said. “However, this has not been decided yet.”

Also read: Weak Ringgit to push up new car prices in Malaysia, regardless if it’s CKD or CBU

Manufacturers in Malaysia have yet to decide whether to increase vehicle prices or to continue absorbing the rising costs. Considering this, Proton Holdings Bhd deputy CEO, Roslan Abdullah, has said the carmaker is trying to absorb the rising cost of raw materials in order to maintain prices.

“We have not decided anything yet. For now, we are still trying to absorb the cost increase,” he said.

Also read: Proton Saga leads April 2022 sales; Final month of sale before facelift’s arrival

But if the situation is worsened, Proton may have to pass on some of the cost increases to customers, Roslan said.

During Q1 2022, 159,752 units of new vehicles were sold, a nearly 13 percent gain compared to the same period in 2021 (141,715 units). With the expected price increase of new cars and no news of the extension of the SST exemption period from the government, could vehicle sales slow down in the coming months?

Also read: MAA: Please extend SST exemption to end-2022, give time to manufacturers to clear backlog