Recovery Plan: Biggest winner automobile sector and car buyers
The short-term National Economic Recovery Plan (June–December 2020) (Penjana), launched by PM Tan Sri Muhyiddin Yassin on 5 June 2020, will help restart the economy after a soft patch against a backdrop of the movement control order (MCO), followed by the conditional MCO, over the last three months to contain the Covid-19 pandemic.
This third stimulus instalment in response to the pandemic with a total spending of RM35bil shall continue to save lives and livelihoods (especially in helping the low-income and disadvantaged groups to tide through these challenging times), restore and revitalise businesses, and aid the economy in adapting to the new normal (work from home, social distancing and digitalisation, including e-commerce and remote learning), steering it back to the growth path.
The biggest winners of the plan are the automobile sector and car buyers with a 100% and 50% sales tax (SST) exemption on CKD locally assembled and CBU fully imported car models respectively from 15 June 2020 until 31 December 2020.
“Based on our channel checks, the 100% SST exemptions will result in a reduction of 7–8% of CKD car prices, while the 50% SST exemptions will reduce CBU car prices by 3–4%,” says AmBank Research.