Perodua to invest RM1.2bil

RAWANG: Perusahaan Otomobil Kedua Sdn Bhd (Perodua) will be investing between RM1.2bil and RM1.5bil over the next three years as it gears up for the imminent liberalisation of the local automotive industry.

Perodua managing director Datuk Aminar Rashid Salleh said the investment would be to upgrade its production line and equipment, improvement to its sales and service outlets nationwide as well as for research and development for new models.

“The reality is that liberalisation will happen sooner or later. It's just a matter of time and we need to transform,” he told StarBiz yesterday, adding that Perodua had also submitted its five-year roadmap (outlining its growth strategy for that duration) to the Government.

And while he did not go into specifics, Aminar said Perodua was looking to introduce new models into the market.


“The reality is that liberalisation will happen sooner or later. It’s just a matter of time and we need to transform,” he told StarBiz yesterday, adding that Perodua had also submitted its five-year roadmap (outlining its growth strategy for that duration) to the Government.
“We hope to have more than three (core) models. We're in the compact and sub-compact business and we believe that there is huge potential (within this segment), so our next model will be within the compact category,” he said.

Perodua's main models currently are its Myvi, Viva and Alza.

On another note, Aminar said Perodua's vehicle sales had dipped to 14,300 units in April from 16,000 units in March, mainly due to Bank Negara's responsible lending guidelines implemented this year.

“Bookings have still been strong. We've had 18,000, 19,000, even up to 20,000 units booked in a single month this year. People are still eager to buy cars. However, when you look at the total registrations (for the month), there is a big difference.”

Following the new lending guidelines that came into effect on Jan 1, loans are now approved based on net income compared with gross income previously, in addition to which is the need for more documentation.

The new guidelines are intended to help manage the household debt in Malaysia to reasonable levels.

“Buyers from Sabah and Sarawak as well as the east coast have been the worst hit. A lot of the purchasers there are farmers and small traders who are not salaried workers and have problems coming up with the necessary documents. But they can afford to pay and make their monthly payments,” said Aminar.

“Also, public transportation in these areas are not up to the mark and travelling from suburb to suburb can be quite a challenge,” he said, adding that Perodua's average non-performing loans level currently was below 1%.

Aminar clarified, however, that Perodua had “no issues” with the central bank's new lending rules.

“Our stand is that we have no issues with the lending rules. What we want is for the approval process to be reduced, like the pre-guideline levels.”

Perodua's sales fell 11% in March to 16,000 vehicles versus 18,000 units in the previous corresponding period. Aminar said the car company was already about 6,000 units behind in its sales target for this year.

“Despite this, we're not revising our sales target for this year. It just means that we need to push (sales) harder in the second half.

“However, if in the next two months we don't see any improvement (in sales), then we might have to revise,” he said.