Perodua: 2014 challenging year for auto industry

by **Cals** Thu 02 Jan 2014, 09:56

Business & Markets 2013

Written by Surin Murugiah of theedgemalaysia.com

Thursday, 02 January 2014 09:44

KUALA LUMPUR: The year 2014 will be a challenging year for the automotive industry due to rising cost and intense competition in the sector, according to Perusahaan Otomobil Kedua Sdn Bhd (Perodua) president and CEO Datuk Aminar Rashid Salleh.

In an email interview with The Edge Financial Daily, he said there is a silver lining as the world economy is showing signs of recovery.

Aminar said based on a world economic report in October last year, major economies such as the US and the eurozone are showing signs of recovery and this is good news for net exporting countries such as Malaysia.

The prime minister, in his Budget 2014 announcement, had said the government expects the country’s economy to grow 5% this year and Perodua believes that the total industry volume will track that growth.

“On our wish list for 2014, we hope that the government, particularly the central bank will keep the overnight policy rate at the current level as any increase in interest rates next [this] year will have a very powerful impact on consumer spending.

“This is because the increase in inflation due to higher cost of power, transport and other items will hit businesses hard as consumers’ purchasing power will further decrease,” Aminar said, adding that higher cost of borrowing on cost-push inflation will only dampen economic activity.

“We also hope that the relevant authorities will continue to engage the industry players and stakeholders on any new regulations they wish to introduce, so that these regulations or policies will be accepted and well implemented.

“These include the introduction of new safety standards, hire purchase guidelines, market liberalisation, new vehicle registration procedures and other industry-related topics,” he said.

Aminar declined to comment on Perodua’s sales forecast for 2014, adding that it will be revealed in mid-January.

On the soon-to-be revealed National Automotive Policy (NAP), he said through a series of dialogue and engagement sessions with the Malaysia Automotive Institute (MAI) and the ministry of international trade and industry, industry players including Perodua were able to air their views on how the sector can improve and move forward in tandem with the market liberalisation.

“This is a step forward compared with the last revision in which there was less consultation with industry players.

“During the dialogues we attended, the government had indicated its vision of making Malaysia a production hub for energy-efficient vehicles and the industry players had given their views on how to make this vision a reality,” Aminar said.

The Edge weekly, quoting MAI, had reported that the NAP will consider the issue of manufacturing licences for energy-efficient vehicles regardless of engine capacity and price. This is expected to attract more foreign carmakers to set up production facilities in Malaysia.

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Aminar: On our wish list for 2014, we hope that the government will keep the overnight policy rate at the current level.

This article first appeared in The Edge Financial Daily, on January 02, 2014.