kuala lumpur: Sime Darby Bhd may increase vehicle prices due to the upcoming sales and services tax (SST) hike.
Group CEO Datuk Jeffrey Salim Davidson said that as no SST rate hike has been imposed, the group will adopt a “wait and see” approach and may adjust depending on the situation. Said it was expensive.
Last year, during Budget 2024, Prime Minister Datuk Seri Anwar Ibrahim announced that Malaysia’s SST tax rate would be increased from 6% to 8%, although food and beverages and telecommunications are not included. It will come into effect from March 1st.
“According to theory, car prices will increase by 2%. It is difficult to say that the profit is 2% as other factors also come into play. However, the demand for cars in Malaysia remains strong. Therefore, the impact Jefri said today during a media briefing on Sime Darby’s financial results for the second quarter ended December 31, 2023 (Q2 2024).
Jeffrey does not discount the possibility that car prices could rise if the factors involved in parts and components in car manufacturing also increase.
At the same time, Group CFO Mohammad Noor Abdul Aziz pointed out that the SST results will not only affect the group but also the entire industry.
“This sales tax increase applies to everyone, and also to the entire auto industry. So this is a cost of doing business, it’s something that applies to everyone, and it’s a new playing field. “We believe that when it comes to demand, we need to manage market forces,” he added.
Furthermore, he announced that Sime Darby’s compulsory acquisition of 100% of UMW’s shares (Holdings Bhd. is expected to be completed by the end of March 2024. As of January 31, 2024, Sime Darby has already acquired all of UMW’s total shares). He also shared that he owns 98.86% of the shares. Holdings.
Mr Jeffrey said that the acquisition of UMW Holdings will enable Sime Darby to add two major mass market brands to its portfolio, primarily Perodua and Toyota, which will grow revenues and unlock further value for the group. He said he was deaf.
“Work is underway to smoothly and seamlessly integrate UMW into the Sime Darby family,” Jefri said, adding that the group has decided to treat UMW Holdings as a third pillar after its industrial and motor division. he added.
“Under UMW Holdings we have Toyota and Perodua. We run it with a separate management team. We have taken the time to understand the wants and needs of each partner, such as Daihatsu, and We need to make sure it works best for Sime Darby,” he said.
Meanwhile, China’s industrial and motor sector’s sales in the first half of 2024 (2024 H1) decreased, with the former recording RM1.22 billion compared to RM1.42 billion in 1H ’23, while the latter recorded RM7.97. This increased from 7.25 billion ringgit in the same period last year to 1 billion ringgit in the first half of 2024.
He pointed out that the group has advanced in the Chinese market over the past 30-40 years and has been profitable for many years.
However, Jefri noted that the group is currently at a “trough” stage in the Chinese market and will remain resilient until the Chinese economy improves according to the normal business cycle.
“We just have to get through this. We’re controlling costs… but we’re going to hang in there because we believe the Chinese economy will recover and come back. It’s just a matter of waiting a little bit.” he said.
“There is no possibility of exiting the Chinese market. The Chinese market is a very profitable market for us. We live in a very cyclical business. View our (financial) history And our numbers are () strong. We have to manage the troughs, we have to manage costs, losses and so on.
“During peak periods, we also run into issues such as wage increases and staff shortages,” he said.
As for China, the group continues to manage the situation and expects the trough to continue for “another year or two”.
