Malaysian consumers tread carefully with GST

And how one auto service provider will weather the storm.

The Malaysia automotive industry experienced a surge in sales in March ahead of the new goods and services tax (GST) which started on 1 April; the month experienced record sales of 67,314 units which is a 14.2% improvement from March 2014 and, according to the Malaysian Automotive Association (MAA), the second highest recorded sales since July 2013.

With the spending spree now over, auto sales is expected to dip in the months that follow, even though automakers have announce a reduction in prices for various models since the 6% tax came into effect: national car manufacturers, Proton and Perodua, have cut prices by up to 3.25% (the highest discount is applicable for the Iriz, if you are keen); Japanese marques, which are extremely popular in Malaysia, namely Toyota, Honda and Nissan, have dropped prices by up to 2%; even luxury German carmaker, Mercedes-Benz, has applied a reduction of between RM2,000 to RM10,000 to pre-GST prices of its models.

Yet, the nation is still adapting to the aftertaste of the bitter pill, which had to be swallowed as the broad-based consumption tax is an effort to reduce the country’s dependency on oil and gas revenue. Malaysia’s economic growth had taken a severe hit from the drastic drop in crude oil prices, and the World Bank has cut 2015 growth forecast from 4.9% to 4.7%. Consumer spending across the nation is expected to be sluggish for what experts estimate could last up six months and businesses are bracing for the slowdown.

Yet, one after-sales auto service provider will weather the storm with one key strategy – patience. According to Wong Wai Ming, founder and Managing Director of S8 Auto, an established auto after-sales service provider, patience as well as the business’ capacity to adapt to internal and external factors will determine its success, even when government policies effect drastic changes.

Wong’s composure, while other businesses are clambering to deal with the after-effects of the GST, is perhaps unsurprising, as his road to success had always been laden with challenges. Wong, a self-made man, dropped out of school at a young age and started his apprenticeship in a tyre workshop; despite his humble beginnings and youth, he was determined to become a business owner even then, embarking on his first car repair business in a makeshift workshop located inside the compound of a petrol station.

Wong recalls the difficulties during these early times – the lack of family support and the inability to afford the latest tools and technology in auto repair and service works were great hurdles that he had to overcome. And overcome, he did. By 1995, while still in his early thirties, he finally fulfilled his dream of owning his first workshop. Since then, S8 has expanded to nine outlets with the tenth one slated to be launched in two months time.

Wong, whose business acumen came from the school of hard knocks, believes that especially in these trying times, it is important to uphold excellent customer service; S8 Auto’s simple but comprehensive service principles are: fast, professional, ensure customer satisfaction, regard customers with respect and provide them with a comfortable environment. 

That being said, he thinks that there is one criterion that takes precedence: “If you want to have satisfied customers, you need to first satisfy your staff,” he says. He believes that a stable company will provide employment stability for the staff; and employers should not skimp on training and providing the necessary equipment for the staff to complete their work. “It is better to retain staff than to recruit new ones,” he adds.

Wong, indulging in his hobby during time-off.

Undoubtedly, S8 Auto is not the only auto after-sales service provider to be affected by the country’s current economic situation, but Wong chooses not to compare his business with others. “I prefer to, in progressing forward, compare my current success with my own past successes. There really isn’t one company that can truly claim to be number one in the business,” he says. “When you work on your internal growth, you can count on your business prospering as well.”

top image: thestar.com.my