The Malaysian Automotive Institute (MAI) expects vehicle prices to fall between 1-3% when the government introduces the new Goods and Services Tax (GST) in April 2015.

The 6% GST, which is charged at every stage of the supply chain, with the final tax burden incurred by the end-consumer, replaces the current single-stage sales tax of 10%.

The institute emphasised that the effects of next year’s tax changes will be very limited with automakers remaining in control of pricing. It also does not expect consumers to delay vehicle purchases in the preceding months, given the limited potential for savings.

The MAI forecasts vehicle sales to rise to 700,000 units in 2015 from 670,000 units this year.

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