Honda announces the inevitable price increase

The continuous drop in the Ringgit currency is finally showing its effects. Due to the constant weakening of our currency, Honda Malaysia has announced their plans to increase the prices of their vehicles effective January 2016. At the moment the company is still analysing the impact and estimates the price increase to be around two per cent to three per cent depending on model.

Managing Director and Chief Executive Officer of Honda Malaysia Mr. Yoichiro Ueno explained, “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.

The company had started the 2015 year strongly with the introduction of the very popular Honda HRV and as at September 2015 they were in the lead in the Non-National Segment. Honda Malaysia ensures that they will be monitoring the exchange rate situation closely and will decide on the price in December 2015.

Stay tuned to find out Honda’s final decision.

Jerrica Leong