It stinks of profiteering. Amid booming sales of motorcycles in the popular under-150cc class, many dealers, especially of top-selling models, are not passing on a discount arising from the government’s waiver of excise duties.Sales in March and April set an all-time record and the under-150cc sector is conservatively projected to grow at a robust 25% to a total of 660,000 units this year.
These are the kind of motorcycles used by 90% of admin staff, blue collar workers, GrabFood and delivery riders and others mainly in the B40 lower-income group.
But they may not be saving as much as RM1,000 off the price of the motorcycle.
A waiver of excise duty of between 20% and 30% on locally-assembled motorcycles under 150cc was announced by Prime Minister Muhyiddin Yassin as part of the RM20 billion pandemic package early this year.
The waiver is valid from March 27 to Dec 30.
On a visit to one of the large motorcycle shops in Jalan Sungai Buloh, Selangor, I asked the salesman how much was the discount after the excise duty waiver. I was eying the current market favourite, the Yamaha YZ15ZR, commonly called the Y Suku, and the Honda ADV150.
The salesman quoted RM9,500 on-the-road, which didn’t reflect the 20% excise duty waiver. It must be noted that 20% is not a blanket rate, the amount may be less depending on the local content of the bike.
Even so, it’s obvious that some of the dealers are not passing on all the excise duty savings to the buyers.
Anti-profiteering officers on the prowl
This has been noticed by enforcement officers of the domestic trade and consumer affairs ministry who are understood to have started visiting motorcycle shops. The officers have also called on the Motorcycle and Scooter Assemblers and Distributors Association of Malaysia and the Malaysia Motorcycle and Scooter Dealers Association for their input.
The challenge is that motorcycles are not under price control regulation, unlike motorcar assemblers.
An industry veteran said: “Say RM9,000 is the sales price, the factory price is RM7,000. Twenty per cent is RM1,400. Let’s say excise duty is RM1,000, that’s the minimum. Either you give the RM1,000 to the government or you give all of it to the rakyat.
“The transparency is not there.
“The gesture from the government is very good. We totally support it. But the mechanism, the execution – how are our people going to benefit? This is just making the shop owner richer, that’s all.”
He said the government did not announce the waiver clearly enough.
“The big dealers are businessmen, they try to profit as much as they can. If you happen to know how to ask, you get the discount. But if you don’t ask, they keep quiet,” said the industry veteran.
Many are flush with money
“I’ve been in the motorcycle business for 38 years and never before in my life have I seen motorcycle sales boom like this. In March this year, sales went up by 58% to 85,000 units, April to 65,000 units,
“Why the hot sales?
“It’s because the government has been giving RM1,000 here, RM500 there, and then the i-Sinar, the EPF. The rakyat have got a lot of money and they’re using their own money. EPF is their own money. And after being locked down for so long, as human beings they get itchy; cannot go out anywhere, buy something. Handphones selling until there is no stock, bicycles sold out, furniture and every other thing is selling briskly.
“Even my staff, now they have so much money in hand. Some put this extra money into their Tabung Haji for the future when they can travel again. There are Grab and other riders who are getting new rides with this extra money and that’s their capital asset investment, which is good, but they are not getting the full rebate which they are entitled to,” the industry veteran said.
Confirming the stickiness of the excise duty waiver, a senior manager of Boon Siew Honda Sdn Bhd said their dealers had been reminded to pass on all the savings to buyers.
“For the Honda RS150, the difference is only RM700 to RM800. So, we’re actually pushing our dealers to reduce,” said the manager, who declined to be identified as he was not authorised to speak for Malaysia’s pioneer motorcycle company.
Waiting for Honda’s RS150 replacement
Boon Siew Honda’s position is less pressing because their market is waiting for the new Honda RS150R replacement, expected in about two months, pandemic allowing. This model has been launched in Vietnam as the Honda Winner X – and if it’s priced below RM10,000, it will sweep the market because the rival Yamaha Y16 is above 150cc and therefore not eligible for the excise duty waiver.
As for the Honda scooter, the ADV150 launched in February, this is positioned at the premium end of the 150cc sector and aimed at active adventure lifestyle bikers. There’s a waiting list for this dashingly styled scooter.
In this context of profit-maximisation, shop owners should remember that there’s a difference between profits and profiteering.
They should also note that the domestic trade ministry under Alexander Nanta Linggi has powers under the Price Control and Anti-Profiteering Act to punish profiteering.
“Profiteering” is defined as making an unreasonably high profit, which is measured by a mechanism prescribed in the price control and anti profiteering regulations, which applies to all goods and services sold in Malaysia.
The views expressed are those of the writer and do not necessarily reflect those of FMT.