Honda Malaysia Sdn. Bhd. (Honda Malaysia or the Company) today announced that prices for Honda vehicles will be increased effective January 2016 due to the depreciation of the Malaysian Ringgit.
The quantum of increase has yet to be confirmed by Honda Malaysua estimates that the increase will be very minimal, about 2 to 3 percent depending on model.
“Honda Malaysia will continue monitoring the exchange rate situation closely and will decide on the price in December 2015,” said the company in a statement to the press released this morning.
Managing Director and Chief Executive Officer of Honda Malaysia Mr. 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. Since the introduction of Honda models with its current price, the Ringgit has depreciated by 20%-30% against the US Dollar. The drastic depreciation of the Ringgit has caused a significant increase to the cost of imported parts and components. 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.”
“The 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. Honda Malaysia has purchased some parts and components earlier when the Ringgit currency was stronger. However, current and future purchases are exposed to the Ringgit instability.
“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 Mr. Ueno.
Despite the challenging market conditions, Honda Malaysia says it is confident of hitting its annual sales target of 85,000 cars this year.
Honda Malaysia's announcement comes after similar announcements from Toyota, BMW, Nissan, and also Hyundai.