Honda Malaysia has assumed the passenger car leadership in the country for the Non-National category, thanks to its best selling compacts such as, the HR-V, City and Jazz. Accordingly, Honda Malaysia’s Managing Director and Chief Executive Officer Yoichiro Ueno remarked that the company has streamlined operations in order to be more efficient and expedited efforts to introduce the latest variants at affordable costs for customers. “Since the introduction of Honda variants 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,” Ueno justified the decision to raise the cars’ prices.
The automotive industry is especially vulnerable to fluctuations of currency due to imported parts and components based on the foreign exchange rates 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 quality products and services to their customers. However, if the Ringgit status does improve in the late fourth quarter or next fiscal quarter, then Honda Malaysia is bound to re-evaluate the pricing structure of its product porffolio. The company has made a resolve to continue to monitor the exchange rate situation closely and implement further re-adjustments by December.
Honda Malaysia enjoyed a strong three quarters of 2015 and is currently leading in the Non-National Segment as at September 2015. It seems Honda M’sia is set to achieve its annual target of 85,000 units for the year.
A complete new price structure of its current product portfolio is expected to be released in the near future. Stay tuned for further updates.