THE new directive on automobile excise duties is good news to lower-income buyers whose car purchases account for an estimated half of the total number of units sold monthly in the Brunei Darussalam.

Under the new directive that comes into force in April this year, the excise duty for vehicles with an engine capacity of 1700cc or lower will be reduced to 15 per cent from the current 20 per cent.

A TCY Motors Sdn Bhd representative said the initiative for smaller capacity cars is good.

"This show His Majesty's concern for the rakyat (citizens) because low-end cars are cheaper and are the major players. Not that many people are buying higher end cars and if you look at the Brunei Automobile Trader's Association report, you can see that. So His Majesty wants to make lower end cars more affordable," said the representative who distributes Audi and Peugeot vehicles in Brunei.

This, however, would not translate to a jump in sales of cars within the small capacity bracket because the reduction in retail prices will not be significant, dealers said.

The price tag for a car with 1600cc, for example, will see a reduction of a few hundred dollars, said a spokesperson from GHK Motors Sdn Bhd, distributor of Mitsubishi and Daihatsu in Brunei.

"It doesn't make people want to rush to buy it because five per cent is very small," he said.

Statistics from the last three Bata reports show that cars below 1,700cc capacity purchased from December 2010 to February 2011 accounted for 50 per cent of total passenger cars sold.

This means that those likely to be adversely affected by this new directive are buyers who comprise 10 per cent of the market.

The Brunei Times