Honda Malaysia says to raise vehicle prices by 2% to 3%

KUALA LUMPUR:  Honda Malaysia Sdn Bhd expects selling prices for Honda vehicles to rise by 2% to 3% starting next January due to the weaker ringgit. 

This follows UMW Toyota’s announcement earlier this month that it would increase selling prices between 4% and 16% next year depending on the models. 

“Honda Malaysia will continue monitoring the exchange rate situation closely and will decide on the price in December 2015”, said the automobile player in a statement on Monday. 

Its managing director and CEO Yoichiro Ueno said: “Over the past years, Honda Malaysia has streamlined operations in order to be more efficient and also worked hard to introduce products at very affordable prices to our customers. 

“The drastic depreciation of the ringgit has caused a significant increase to the cost of imported parts and components.”

The ringgit has weakened by 20% to 30% against the greenback since the introduction of Honda models at current prices. 

“Despite our efforts to reduce operational costs and expenses to mitigate the impact, we have to take the last measure to shift the impact partially to the price,” he added. 

The company explained that automotive industry is especially vulnerable to fluctuations in currency due to imported parts and components in foreign exchange but the effect is usually not immediate. But current and future purchases of imported parts are exposed to the volatility of the ringgit.

“After weighing all possible options, a price increase is an inevitable step for Honda Malaysia in order to continue offering high quality products and services to our customers. If the Ringgit currency appreciates to the previous level, we would reevaluate the pricing structure once again,” added Yoichiro. 

He said Honda Malaysia began 2015 strongly and was currently leading in the non-national segment as at September and was confident that it would achieve its sales target of 85,000 cars for the year.