The Ministry of Finance said today that the recent hike in the price of new Honda vehicles does not affect the current situation in the country’s automotive industry.

It said the government had always ensured that tax policies imposed on the locally assembled or completely knocked-down (CKD) vehicle production industry would not stymie business growth and increase the market price of CKD vehicles.

"The people will benefit directly from the tax incentive enjoyed by CKD vehicle producers through competitive sale prices and indirectly benefit from the economic opportunities created, in line with the government’s aspiration under the National Automotive Policy (NAP) 2020," it said in a statement.

The ministry said there is no change in the exemption policy on excise duty or customised incentive under the Industrial Linkage Programme (ILP) and that the local automotive industry would remain stable.

"It is imperative that companies comply with the audit review and adhere to the existing duty/tax exemption policy and incentive so as not to raise any issue, and act fairly to all companies that abide by the same basis and use the right criteria.

"The Automotive Business Development Committee (ABDC) as the party that evaluates and recommends incentive approval for companies is still using the same assessment method without any changes.

“Hence, the excise duty exemption rate enjoyed by Honda at this time is reasonable and corresponds with the actual level of localisation achieved by the company,” explained the MOF.

The MOF issued the statement following a media release by Honda Malaysia company on Friday (Feb 21) announcing a five percent to nine percent increase in the sale price of some of its models and variants effective Feb 21.

According to Honda, it made the hikes after a review of the customised incentives for its CKD vehicle production.

- Bernama