PETALING JAYA: Honda Malaysia today announced that prices for its vehicles will be increased effective January 2016 due to the depreciation of the ringgit. The company estimates the price increase to be around 2% to 3% depending on model.
Honda Malaysia will continue monitoring the exchange rate situation closely and will decide on the prices in December 2015.
It also said that should the ringgit strengthen at a later time, it would review prices again.
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The automotive industry is especially vulnerable to fluctuations in currency due to imported parts and components in foreign exchange but the effect is not immediate but creeps in slowly. Honda Malaysia has bought some parts earlier when the ringgit was stronger. However, current and future purchases are exposed to the ringgit instability.
"Since the introduction of Honda models with its current price, the Ringgit has depreciated by 20%-30% against the US dollar," said Honda Malaysia managing director and chief executive officer Yoichiro Ueno.
"The drastic depreciation of the ringgit has caused a significant increase to the cost of imported parts. 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.
“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 re-evaluate the pricing structure once again,” said Ueno.
Honda Malaysia began 2015 strongly and is currently leading in the non-national segment as at September. The company said it remains on course to achieve its 2015 sales target of 85,000 units.