A newspaper cover story jumped out at us yesterday, and it was BH Ahad‘s ‘Harga kereta turun’ headline. The eye-catching headline was supported by visuals of local, Japanese and European cars, purported examples of models that are now cheaper (by 8% to 20.77%) thanks to “the strengthening of the ringgit” and “the government’s automotive policy”.
It merited a flip to pages four and five of Berita Harian‘s Sunday edition, which revealed more examples of cars that are now cheaper compared to five years ago. According to the report, the Perodua Alza is now 14.18% (RM8,369.27) cheaper, the Proton Exora 2.25% (RM1,509.67) cheaper, the VW Golf 11.77% (RM20,000) cheaper, the Honda Jazz Hybrid 8% (RM7,650) cheaper, the Perodua Myvi 12.15% (RM6,124) cheaper, the Proton Preve 20.77% (RM15,157.19) cheaper, the Proton Saga 14.88% (RM6,220.71) cheaper and the Proton Persona (RM8,281.91) 15.59% cheaper.
If you remember, both Barisan Nasional and Pakatan Rakyat touted the reduction of car prices in their respective manifestos for the previous GE. The BH report reminds its readers that BN’s “Menepati Janji Membawa Harapan” manifesto included a promise to reduce car prices by 20% to 30% in stages, and revise the 2014 National Automotive Policy (NAP) to improve the competitiveness of the national car.
Measures include government policies to reduce car prices via gradual liberalisation, which leads to a more open market and incentives that are customised to the industry’s needs. This has led to a downward trend in car prices since May 2013, the BH report says. Car prices are down thanks to the strengthening of the ringgit, lower import costs for machinery and better economies of scale thanks to higher volumes.
A more open market creates healthy competition, which in turn benefits the consumer with lower prices and better specced cars. Incentives to carmakers in the form of lower taxes are dished out on the condition of lower retail prices, the article adds.
The report interviewed Fahrurazi Othman, a senior consultant at Frost & Sullivan. The analyst opines that a 30% reduction in car prices is achievable in five years at the earliest. According to the ministry of international trade and industry (MITI), car prices are down by 13.1% (last year, compared to 2014), especially for Energy Efficient Vehicles (EEVs).
Some of the above might be debatable, especially the strength of the government’s claim that it is the reason car prices are down, if at all, but let’s leave that for another day and look at the hard figures in the article – the quoted prices. If some of the figures appear suspect at a glance, your suspicions aren’t without basis. Here, we compare the chosen vehicles with the equivalent variant (or closest to it) available today, with help from our story archive. Apple to apple, insurance (with or without) being equal.
Let’s start with the Perodua Alza. The 2013 price quoted (RM59,017) was for the 1.5 SE Manual while the 2018 price is for the 1.5 Standard Manual. If an apple to apple 1.5 Standard MT is made, the reduction is 2.1% and not 14.18% as claimed. At the Alza facelift launch in 2014, Perodua itself said that price reduction was between 2.1% and 7.4% depending on variant.
For the Proton Exora, the old price quoted (RM67,212) was in fact taken after a 2016 range-wide price increase, and not from 2013. The quoted price is also on-the-road with insurance (old) versus OTR without insurance (new), which of course makes a difference. In actual fact, the MPV was priced at RM63,552.54 in 2014, RM64,498 in 2015-2017 and RM65,702.33 now, but there’s more equipment in today’s car.
As for the Volkswagen Golf, the old price in the report is wrong. The Mk7 1.4 TSI was launched in early 2013 for RM157,888 (the same price as the outgoing Mk6 in final SE form) and not RM169,888 as printed by BH. The new price quoted is for today’s 1.4 Comfortline, which has less equipment. Today’s Highline is closer to the 2013 car in specs, plus a few extras. It retails for RM159,888.
Moving on, the old price for the Honda Jazz Hybrid was from the previous-gen CBU imported version. If you compare the previous-gen CKD version (launched in 2012 for RM87,404.50 OTR without insurance) with today’s CKD Jazz Hybrid, it’s a 2.9% drop, not 8%.
For the Perodua Myvi, the prices used by the report was for the old 1.3 SE AT versus the new 1.3 Standard G MT, which is not like for like. In 2013, the cheapest Myvi was priced at RM40,650.45. The most affordable new Myvi is the 1.3 MT at RM44,300, but it must be said that one gets significantly more equipment today – LED headlamps, keyless entry and start, VSA, four airbags versus two.
For the Proton Preve, the old price mentioned is from the sedan’s launch back in 2012 – RM72,990 for a 1.6 CFE Premium, OTR with insurance. The new price mentioned is for a 1.6 NA Manual, OTR without insurance. Pitting high spec auto with base spec manual will of course result in a big difference in price.
Staying with Proton, the old Saga price used is for the 1.3 Executive MT while the new price is for the current 1.3 Standard MT, both OTR without insurance. In 2013, the cheapest Saga one could buy was the 1.3 SV MT for RM32,836.50. Today, a new 1.3 Standard MT is RM35,590.29, but you get ABS.
There have been legitimate price drops thanks to the government’s CKD EEV incentives, though. BMW and Mercedes-Benz both had downward revisions in prices for CKD models in 2015-2016. Last month, Lexus announced that the price of its LX570 SUV is now lower by RM74k (to RM850k). The latter is due to forex movements, although it’s probably more of the original price set during a low point for the ringgit than our currency gaining ground.
Speaking of premium brands, many are also recipients of CKD hybrid incentives. Mercedes-Benz, BMW and Volvo all sell generously equipped plug-in hybrids that are cheaper than they should be; ditto the Hyundai Ioniq and Honda City/Jazz Hybrid in the mass market.
So, it’s clear that the new versus old prices in the report were cherry picked for convenience, without taking into account variants and specifications. Based on the old prices we’ve dug up, it appears that car prices have not come down by much in general.
However, now is a much better time to be a car buyer than in 2013. Cheaper premium cars aside, mass market players (especially Proton and Perodua, new Myvi is a great example) have largely maintained sticker prices while increasing equipment and safety levels. We are getting better cars than before, and better value for the same money – there’s no doubting that.
Some say that cars in neighbouring countries are much cheaper. Well, RM60k (RM5k more than the top Myvi) buys you the base Yaris J Eco in Thailand. The compact hatchback is powered by a 1.2 litre engine, rolls on steel wheels and doesn’t have a radio. On the other end of the scale, the BMW 530e plug-in hybrid, launched here last month at RM344k, retails for RM457k in the Land of Smiles.