Piston.my

exports

By now, Malaysians would know that the Movement Control Order (MCO) will not expire on April 14 but continue till April 28, 2020. The reason is to give more time for the effects of social distancing and restricted movements to slow down the spread of the COVID-19 coronavirus and ‘flatten the curve’. The latter refers to a graph which projects the number of infected cases and the ‘flatten to curve’ will keep the number lower so that our medical facilities can cope.

In Europe and America, the number of cases has gotten so high that hospitals cannot cope and lives are being lost because of insufficient life-saving equipment and even beds. We do not want that to happen in Malaysia and it seems that the MCO has worked to some extent although the Health Ministry’s Director-General says that more time is needed.

Understanding that the restrictions, which have included closure of most businesses, has seriously affected the economy and put increasing pressure on workers, the government will permit certain sectors to operate in what we hope is the final phase of the MCO. The sectors involve industries such as machinery and equipment, social health services, construction, aerospace, optical shops, laundry shops and barber shops. Earlier, hardware shops had already been allowed to operate on certain days and within certain hours.

Proton

Some sectors of the auto industry are also allowed to operate in the coming weeks. These are plants and companies which are involved in the assembly of vehicles for exports (production for the domestic market is not allowed). This would mean brands such as BMW, Mazda, Perodua, Peugeot, Proton and Volvo, along with the companies which provide parts to them.

It’s good news but might not be as helpful to the companies as it seems. There are still parts and systems that are imported from not just other ASEAN countries but also Japan and Europe and with many production facilities shut down, it may not be possible to finish assembly of the vehicles. Just one part not being available means the vehicle cannot be completed although there might be a small stock of the parts.

Assembly

However, most automobile factories today operate on a just-in-time system where a minimum stock is kept to reduce storage space requirements. Under normal circumstances, the supply chain from overseas is constant and that’s fine. Now with many sources shut down and also local restricted movements for which exemption will be needed to get the parts out from the ports, it will be a challenge for the assemblers.

Then there’s the matter of whether importers in other countries want new vehicles. Vehicles from Malaysia are exported mainly to ASEAN countries as the ASEAN Free Trade Area (AFTA) agreement allows them to be imported duty-free. But Thailand, Indonesia, Brunei and the Philippines are all under similar crisis conditions and sales would be down.

Service centres allowed to open
When the MCO was first activated, all service centres had to close. The only allowance was for emergency services to tow disabled vehicles or change batteries, but no work was to be done at the premises. If a car was towed there, it would remain there until the MCO was over before any repair work could start.

Service centre

Now, it has been announced that ‘aftersales activities’ will be allowed to resume from next week (provided approval is given to the company by MITI). This is taken to mean that the service centres can operate and receive cars for servicing. So far, it is not known if the companies will open their service centres and we’ll only know after Monday when applications are submitted.

The manager at a company selling a leading brand said that there is also concern about their own people getting infected and whether it is worth the risk for now. Furthermore, with the 10-km range imposed under the MCO, there may be vehicle owners who may be beyond range to reach the authorized service centres.

The personnel at roadblocks have been instructed to be stricter and many people have been charged with disobeying the regulations, which means a RM1,000 fine or 6 months in jail (higher penalties might be considered).

Roadblock

Basically, for private motorists, besides the 10-km range from your home that you can travel to buy essential items or for emergencies, only one person can be inside the vehicle. You may be required to show proof of residence which, if not the same as what is on your MyKad, can be shown with TNB or water bill for your current place of residence. You are not allowed to wander around after making your purchases and should return straight home.

As everyone from the Prime Minister to the medical personnel at hospitals has appealed: STAY AT HOME. This is how you can do your part in the War on COVID-19. It may be frustrating and for many, a worrying time as it creates uncertainties about the future but we need to make the sacrifices so our lives can return to some normalcy (although things will be different for sure).

Social distancing

PISTON.MY

BHPetrol RON95 Euro4M

Of the 11,567 units of BMW, MINI and BMW Motorrad (motorcycle) vehicles that BMW Group Malaysia delivered last year, 3,148 were electrified models with all-electric or hybrid powertrains. These joined the total of over 17,000 electrified vehicles delivered by the company since 2015.

On a global scale, a total of 145,815 electrified BMW and MINI vehicles were delivered worldwide in 2019, contributing to half a million such vehicle vehicles delivered to date.

BMW Group Malaysia Charges into 2019 (9)

2019 also marked the third consecutive year BMW Group Malaysia expanded the infrastructure for electromobility in the country, having introduced 18 new BMW i Charging Facilities across Malaysia. This brings the number to over 30, set up within 3 years.

Sales by brand
The BMW brand saw 9,300 new owners in Malaysia last year, with more than a quarter (2,514 units) having chosen the 3-Series. Another key contributor in 2019 was the 5-Series, with over 2,000 units delivered nationwide.

The X Family recorded total sales of 3,985 units and the X3 sold in the largest volume (1,354 unit), followed closely by the X1 (1,331 units). The electrified X5 xDrive40e accounted for 24% (975) of total deliveries, making it the third bestselling BMW X model in 2019.

BMW

MINI Countryman Plug-in Hybrid

MINI delivered 1,142 vehicles last year, with the Countryman version accounting for more than half the number (685 units). Worldwide, MINI brand deliveries totalled 346,639 units in 2019.

Exports from Malaysia
Having made big investments in its production facilities at the Inokom plant in Kedah, BMW has also exported some of the production. Including engines, to other ASEAN markets. It has been exporting the 5-Series to the Philippines and is also preparing to export other models in future, including the 7-Series. Vehicles imported to other ASEAN markets can enjoy duty-exemption under the provisions of the ASEAN Free Trade Area (AFTA) agreement, enabling distributors to sell them at more attractive price levels.

BMW 5-Series
The 5-Series assembled at the BMW facility in Kedah, as well as engines also produced there, are exported to neighbouring countries and enjoy duty-free importation under the AFTA agreement.

BMW engine plant

Financial services
With a range of flexible financing plans, BMW Group Financial Services Malaysia also achieved a strong business portfolio, having financed half of the new BMW and MINI vehicles delivered last year. Its Easy Drive financing solution provides flexibility as well as affordability to customers.

New sales records in 2019 make BMW M GmbH most successful manufacturer in its segment

PISTON.MY

BHPetrol RON95 Euro4M

Mercedes-Benz Malaysia (MBM) closed another year as the leading brand in the premium luxury segment with a total of 10,021 passenger vehicles (including SUVs) sold. That captured a 1.8% market share and overall 7th position.

Mercedes-Benz Malaysia

“We wrap up the decade on a great note as we continue to grow our customer base and set our footing in the country. 2019 was a year where we placed great emphasis on expanding our product offensive with innovative technology and emotional design, catering to the needs of our customers. Through a solid leadership and vision, we reaffirmed our commitment to the Malaysian market and our customers in delivering the ‘Best Product and Best Customer Experiences‘,” said MBM President & CEO, Dr Claus Weidner.

“Despite facing headwinds, we ended the year on a strong note to cement our position in premium automotive segment. We delivered 10,021 vehicles to our Malaysian customers signifying a continuous mark of confidence towards our brand. We are fully confident that 2019 has set up a great tone as we power up a great momentum for the new decade,” added Vice-President of Sales & Marketing at MBM, Michael Jopp.

Mercedes-AMG

Key launches that took place includes the E-Class with the debut the E 350 AMG Line, E 200 SPORTSTYLE Avantgarde and E 300 Exclusive Line; A-Class sedan (A200 and A250); latest GLC and GLE SUV models, Mercedes-AMG A35, the Mercedes-AMG GT R and GT C, plus the new GLC 200, 300 and 300 Coupe SUV models. The AMG line-up also broadened with the inclusion of the Mercedes-AMG GT 63 S 4MATIC+, Mercedes-AMG C 63 S Coupé, and the Mercedes-AMG C 63 S.

MBM also introduced its first ever S-Class Plug-in Hybrid, the S 560 e, while the Mercedes-Benz EQ brand experience was presented with the highly-anticipated Southeast Asian premiere of the all-electric EQC. The EQ range signifies a new era of mobility in the country without compromising on luxury, comfort, quality, design and driving dynamics for which the German brand is well known.

Mercedes-Benz assembly line in Pekan, Pahang (archive image)
Mercedes-Benz assembly line in Pekan, Pahang (archive image)

MBM’s Pekan Plant in Pahang rolled out its 100,000th vehicle during 2019. Currently, the plant assembles 13 variants from 5 model lines and Mercedes-AMG models are included as well. Exports to the Philippines also began last year with the C 180 left-hand drive variant. This is the first stage of export activities for the plant and there will be similar initiatives within the ASEAN region in coming years.

Throughout 2019, MBSM financed 5 out of every 10 new Mercedes-Benz vehicles sold and has a concrete servicing portfolio of RM2.6 billion. The financial arm of MBM recorded new contracts worth over RM1 billion and introduced new financing and insurance solutions such as Mobility Plus, the first-of-its-kind car replacement program in Malaysia’s auto financing industry along with Lease@Ease, an all-in-one lease payment plan with value added services such as Tyre & Rims and Comprehensive Insurance with Service and Maintenance.

Mercedes-Benz is the world’s most valuable luxury car brand of 2019

PISTON.MY

BHPetrol RON95 Euro4M

2019 was a great year for Perodua as it surpassed all previous sales volumes with a total number of 240,341 vehicles delivered. The volume was 5.8% higher than the figure for 2018 which had been the prior record. The Malaysian Automotive Association (MAA) will be releasing the full year’s sales data tomorrow but by Perodua’s own estimates that the Total Industry Volume (TIV) for 2019 was 604,775 units, the Malaysian carmaker’s share would have been 40%, an increase of 2% from 2018.

Announcing the achievement, Perodua’s President & CEO, Dato’ Zainal Abidin Ahmad, said that all five models in its range – the Alza, Aruz, Bezza, Axia and Myvi – were segment leaders, with the Aruz notable for being Malaysia’s best-selling SUV with 30,115 units sold.

Perodua showroom

Export growth to get more attention
Continuing with its efforts on exports, the total volume sold in other countries last year was around 2,825 units, of which 1,800 units of the Myvi were purchased by Daihatsu and sold under its brand in Indonesia. To date, Perodua exports to 7 countries and Sri Lanka is its second largest overseas market where the Bezza was the bestselling sedan in the sub-1.0 litre segment.

Perodua in Mauritius
The latest Myvi introduced in Mauritius attracted a lot of attention.

“While our exports remained modest, we are making good progress in establishing our brand overseas and are looking at further improving the numbers this year,” said Dato’ Zainal. He said that the government has urged Perodua to export more of its vehicles. However, there needs to be proper market studies to ensure that the products are the right ones (at the right price levels) and the marketing done properly. Since 2018, Perodua has stepped up its attention to exports after having been busy on its transformation and cost-competitiveness activities earlier.

Healthy aftersales business continues
Given the position at the lowest end of the market with the most affordable vehicles, it would seem that Perodua customers are probably going to buy one or two and then move upwards to other brands as their personal financial circumstances improve. They would also be less likely to continue using the aftersales services available from Perodua, believing that it’s cheaper to go to the smaller independent workshops.

Perodua service centre

However, Perodua’s figures show that there is a fairly high rate of retention in the aftersales business. Since 2015, service intake has grown by some 20% and while this would also be in tandem with the rising annual sales volume, there are still many owners who continue to return to Perodua’s service centres even after many years. Last year, the service centres nationwide handled over 2.35 million vehicles.

“We have the largest vehicle sales and service network in Malaysia. Our intention is not so much to expand further but to enhance the facilities we already have by working closely with our dealers for the benefit of our valued customers,” said Dato’ Zainal. “In this respect, the company is working with its dealers, which currently make up 75% of its sales and service network, to invest and upgrade facilities.”

Supporting local suppliers
Both Perodua and Proton have had the obligation of helping to develop the domestic automotive industry, particularly the suppliers so that parts and systems can be obtained locally. Perodua has been diligent at this and has consistently helped its suppliers to grow and remain ‘healthy’. Even in difficult market conditions when sales have slowed down, Perodua has stepped in to assist in various ways so that the vendors do not have serious financial problems that impact their ability to deliver on time and maintain quality.

Transmission production
Transmission production at a factory in Negeri Sembilan.

Last year, Perodua purchased around RM5.4 billion worth of parts from suppliers and at least 90% of the parts in its vehicles are local content. The suppliers themselves not only enjoy steady business from Perodua but a few are also supplying to Daihatsu factories overseas, an indication that Malaysian suppliers can also produce world-class products that meet the stringent quality demands of Japanese manufacturers.

Dato’ Zainal said he welcomed the healthy competition from Proton as it will only serve to motivate and strengthen Perodua. Furthermore, as Proton’s volumes rise, the suppliers will also prosper and be able to achieve better economies of scale with bigger orders from both carmakers. This will also help them lower their prices, a win-win situation for manufacturer and supplier.

Looking ahead
While the government expects GDP growth to be 4.8% in 2020, Perodua is cautious about its sales performance at this time until some issues – like the new National Automotive Policy – are clearer. So for now, the forecast for numbers remains at 240,000 with a market share target of 40%. Production volume is planned to rise by 4.1% or 10,000 units in anticipation of increased exports as well as fulfilling the backlog of orders for certain models.

Perodua Kancil
Providing affordable cars for Malaysians has been one of Perodua’s constant objectives from the time it started.

With regard to price increases predicted in the near future (due to a revision of taxation for vehicles), Dato’ Zainal gave assurance that this won’t happen for Perodua products right away. “Our mission has always been to provide affordable vehicles and we would not just pass on any increases to customers. We will address the situation by ‘counter-measures’ to try to keep prices stable for as long as possible,” he explained.

On new models to be launched, he did not elaborate on specific models although the market is buzzing with rumours of a new compact SUV designated the D55L. This is said to be based on the Daihatsu Rocky launched in Japan last year and sits on the DNGA (Daihatsu New Generation Architecture) platform.

Daihatsu Rocky
New Daihatsu Rocky launched in Japan last year is expected to be the basis of a new compact SUV model. How close will the Perodua version look to this?

However, Dato’ Zainal did share with us the product direction of the company which takes into account industry trends which could give clues to what the future product will have. In the slide, there were four subjects – Connected, Autonomous, Shared Services and Electric. These hint at features like cruise control which is a form of autonomous operation and might even be advanced cruise control with adaptive speeds. As it is, the A.S.A. driver assistance system already has autonomous capability such as automatic braking so Perodua may be able to get more advanced systems at a cost which allows them to be offered without raising the price.

‘Electric’ doesn’t necessarily mean an electric powertrain and Dato’ Zainal mentioned ‘downsizing’, the industry trend of reducing engine sizes but maintaining or improving performance through using direct fuel injection or turbocharging. Well, as it is, Perodua engines started off with an 850 cc engine in the Kancil and its range has had the smallest engines all this while. So they can’t get any smaller but adding an electric motor as a hybrid powertrain or using an electric compressor could be under study now.

Much of the advanced technology development would be done either by Daihatsu, its technical partner, or the suppliers. But where design and upper body development are concerned, Perodua R&D aims to further increase its capabilities. Since the development of the first Myvi, when Perodua was a ‘junior partner’ in the project which also involved Daihatsu and Toyota, the Malaysian carmaker’s capabilities have grown steadily. It reached a point where Malaysians could develop the Bezza sedan which is a model that you will not find in the Daihatsu range. Bear in mind that even adding a boot to the Axia involved engineering competence and it was not just a ‘cut-and-weld’ exercise.

Dato’ Zainal revealed that Daihatsu Indonesia has also called on Perodua R&D to assist in product development for models sold in Indonesia. He said that it is hoped that Perodua can become the ASEAN hub for Daihatsu where R&D is concerned. While Daihatsu’s operations in Indonesia are larger, they are more focused on production whereas Perodua has made bigger investments on R&D facilities.

Perodua
Aerial view of the Perodua complex

“We have invested RM1.4 billion to date, which is higher than what Indonesia has spent on R&D, and we plan to continue investments in this area. Some of the money will go into extending the test track to 5 kms so that testing can be more comprehensive. Therefore, we hope that Daihatsu will consider making Perodua its R&D hub for ASEAN while Indonesia could be a production hub,” he said.

Perodua has a strong position as market leader, which it certainly deserves. But it is not going to take this dominance for granted and ‘relax’ and even though Proton, its closest rival, is intent on regaining its No.1 position, Perodua will stay focused with its own strategic plans for the coming years.

Perodua centralises production of parts for old models with RM7 million investment

PISTON.MY

BHPetrol RON95 Euro4M

Going into a new year and new decade, Proton is gearing up for a stronger push in 2020 to become No.1 in the Malaysian market and No.3 in ASEAN. Last year’s performance was impressive as the carmaker sold more than 100,000 units again (100,821 units, including exports), a volume not achieved since 2015. By its internal estimates, Proton believes it achieved the strongest sales growth among the top 5 brands in Malaysia in 2019, with overall market share likely to be 16.7%.

Proton Tg Malim 2019

In the past, the achievements would have put everyone in a celebratory mood, lulled into complacence again and relaxing. The company is back in a good position so pressure on the accelerator pedal can be eased. But for Dr. Li Chunrong, the company’s CEO, what was achieved in 2019 is now history and backing off is the furthest thing from his mind. He’s not going to allow the company to fall into the trap where everyone starts to become complacent and suddenly, other brands zip past because they didn’t take their foot of the throttle.

For 2020, Dr. Li has given everyone in the Proton family a new set of challenges – sell 32% more vehicles and reach 132,000 units (he thinks a higher number is possible) with more attention on exports as well. The target is 4,000 units for this year but there are challenges in going into other markets where Japanese brands have dominance and volume to price their products competitively. So Dr. Li hopes the government will give Proton help in its export efforts, mainly to make its prices competitive enough which is difficult as the production cost is still high.

Two new products in 2020
The Proton range for 2020 will remain the same and there will be two product launches during the year – the locally-assembled X70 and the smaller X50 later in the year. Assembly of the X70 at the Tg. Malim plant in Perak started late last year and stocks are building up so it shouldn’t be long before Malaysian-made units arrive in showrooms. Rumours are that it will have enhancements which increase its appeal and value for money compared to the ones which have been imported in CBU (completely built-up) form from Geely’s factory in China.

Geely Binyue Proton X50
The Geely Binyue will be the basis for the new X50 which will be launched in Malaysia later this year.

As for the X50, it is no secret that this will be adapted from a Geely model known as the Binyue, just as the X70 was adapted from the Geely Boyue. And like the Boyue, it’s not just a matter of changing the badge on the grille and getting Proton Design to add a Malaysian touch to the styling. To develop the X50 will require an engineering program that is almost like developing a new model, more so because there is no righthand drive version. The advantage of using the Binyue platform is that it has been fully engineered so time and money can be saved, an approach used by other carmakers which share platforms.

Dr. Li revealed that, unlike the X70, the X50 won’t be made in China and shipped to Malaysia initially. The factory in China is probably not very happy to have to do the ‘small’ volume of X70s when it needs all the capacity it has for producing Geely vehicles so the first X50 will come from the Tg. Malim plant. Perhaps Geely is confident that enough experience has been gained in the X70 project that the X50 can be born in Malaysia instead of China.

The future of the other legacy models remains unknown but with the Saga doing extremely well, Proton has even started a second shift to produce it. It is clear that quality was something which matters a lot to Malaysians and neglecting it in the past was one of the reasons for Proton’s sales decline. With Geely providing guidance and assistance, build quality has risen and the cars are now very much in demand, topping their segments as well.

More 3S outlets to be opened
One of the things which Dr. Li felt needed a major transformation was the retail network. He saw that the experience Proton customers were getting, whether in the showroom or service centre, was not good enough. So one of his early efforts focused on upgrading the outlets and insisting that the dealers must invest in 3S facilities that provide sales, service and spare parts (and more, if possible) in one location. He met with resistance initially, but he did not give up and slowly convinced the dealers that it was in their interest to provide facilities that made the experience of owning a Proton a very good one.

Proton
Proton showrooms today are very different from before and customers have an experience that can make them want to own a Proton and be proud owning one.

Proton

Today, while there are still 1S (showroom only) outlets which are old ones, the majority are 3S and 4S outlets. During 2020, the number will be raised to at least 150 and that is considered optimum for the projected volumes to be sold. Dr. Li understands that dealers must make good money and the sales per outlet must be reasonable. He won’t make the previous mistake when Proton acquired USPD and together with EON, doubled the size of its network, with the assumption that its sales volume would also be doubled. Instead, dealers suffered and not surprisingly, motivation was poor which impacted the brand.

As the Proton CEO said, 2019’s achievements are history and 2020 is a new challenge, so expect to read more news about Proton as it speeds upwards and forward to regain its dominance in the Malaysian market.

Proton’s annual sales crossed the 100,000 level in 2019, first time since 2015

PISTON.MY

With domestic market sales on the upswing, Proton is now giving attention to exports, which will be crucial for its future. Its products have been well accepted in neighbouring countries and can be exported duty-free under the provision of the AFTA agreement.

Following the launch of the Proton X70 in July last year, Pad Motors Sdn Bhd, the distributor for Proton in Brunei has received its first shipment of the updated Iriz, Saga and Persona models. Brunei is the first market outside Malaysia to begin selling these models and the distributor will be introducing them more actively with a roadshow starting on January 28.

Proton Brunei

Proton Brunei

Focus on growing export volume
After a successful 2019 saw the total sales volume grow by 55.7% – which Proton expects will place it in second overall position – the Malaysian carmaker is now looking to improve its performance in 2020 in export volumes.

“The export market will play an increasingly important role in growing Proton’s annual sales. When we updated the Proton Iriz, Persona, Exora and Saga last year, we did so while taking in to account the needs of markets outside of Malaysia and today, three of those cars are now available in Brunei. It’s a good start to 2020 but as the year progresses, we will be looking to export our cars to more countries,” said Dr. Li Chunrong, Proton’s CEO.

Proton
The Middle East is one of the regions where Proton is already exporting to.

Aiming for No.3 in ASEAN
Dr. Li added that Proton’s long-term intention is to be the best-selling brand in Malaysia and Number 3 in ASEAN by 2027. In order to meet the ASEAN target, export volumes will need to be boosted in coming years.

Aside from its updated models, Proton will also be looking to grow sales of the X70. With 2020 versions already leaving the production line at the Tanjung Malim (which has a new RM1.2 billion extension), the carmaker now has the option of expanding the footprint for its SUV which recently won the 18th Malaysia Cars of the Year overall award.

Proton Tg Malim 2019
With an additional investment of RM1.2 billion for an extension at the Tg. Malim factory in Perak, Proton can now plan for bigger export volumes in coming years.

“Exporting the Proton X70 will be critical for Proton’s future sales growth, especially in neighbouring ASEAN countries. It will spearhead the introduction of the next generation of Proton models currently being jointly developed with Geely and will lay the groundwork for the brand with customers in these markets,” added Dr Li Chunrong.

Visit www.proton.com.my to know more about the X70 and other models in the Proton range.

Introduction of new brand logo marks start of Proton’s next chapter

PISTON.MY

Perodua aims to export 3,270 cars in 2019 – a 50% increase over last year’s 2,184 units. So far this year, the Malaysian carmaker has sent over 1,600 units to distributors outside Malaysia, with the Myvi and Axia being launched in Singapore and the Seychelles, respectively.

Now Mauritius is the export market to get the latest Myvi, after Indonesia (where it is sold as the Daihatsu Sirion) and Singapore. The island nation is one of Perodua’s oldest overseas markets and nearly 2,400 have been sold there since 1996.

The model made its debut recently at the Defi Media Motor Show, which took place at the Swami Vivekananda International Conference Centre in Mauritius. It is imported and distributed by Raouf Dusmohamud & Co Ltd.

Perodua showroom in Mauritius
A Perodua showroom in Mauritius, one of the Malaysian carmaker’s oldest export markets.

Contributing to export target for 2019
“The third-generation Perodua Myvi has been very well-received in Malaysia and we believe Mauritians will appreciate its many qualities,” said Perodua President & CEO, Dato’ Zainal Abidin Ahmad. “The Myvi’s Mauritian debut should edge us closer to our year-end export target and boost Perodua’s brand exposure internationally, what with Mauritius being a major tourist destination.”

“Unique styling, amazing interior space and clever yet practical features join forces with high quality and durability for its occupants’ comfort and convenience. “With LED headlamps, keyless entry and start, Bluetooth, 4 or 6 airbags and stability control standard on both variants, the new Perodua Myvi is a very sophisticated and advanced product that Mauritians can truly get excited about,” said Raouf Dusmohamud & Co Ltd’s Managing Director, Raouf Dusmohamud.

Perodua Myvi in Mauritius

Enhanced the ownership package
“Plus, we’re sweetening the ownership package for our valued customers by offering free servicing up to 30,000 kms with every Myvi purchase, which we are now also extending to all the other Perodua models in our current line-up, namely the Alza, Axia and Bezza,” he added.

Two variants of the Myvi are offered in Mauritius – the 1.3 G AT and 1.5 H AT, priced respectively at 699,000 (equivalent to RM81,300) and 775,000 (RM90,140) Mauritian Rupees.

Visit www.perodua.com.my to know more about the company and its products.

Click here for other news and articles about Perodua on PISTON.MY.

PISTON.MY

The ASEAN Free Trade Area (AFTA) was conceptualised in the early 1990s and all the member nations signed an agreement to establish it in 1992. It was intended to create a regional trade bloc where goods and services could be exchanged between ASEAN countries with preferential tariffs .

The AFTA agreement’s main feature was the Common Effective Preferential Tariff (CEPT) which required all ASEAN members agree to adopt the same tariff structure and impose import duties of between 0 and 5% on goods and services which originate from any ASEAN country. A condition is that at least 40% of the content of the goods should be of ASEAN origin, besides being made in one of the ASEAN countries. This applies to finished goods, like complete vehicles, as well as components.

The benefit of AFTA to carmakers
Why have AFTA? The simple answer would be strength in unity and size. Having AFTA also means that instead of separate small markets, there will be a single larger one which can be treated as a single common market and estimates in the 1990s already placed the number of consumers at over 550 million – larger than the European Union then. Many ASEAN consumers were already in the middle class or moving into it (although the financial crisis of the late 1990s slowed things down a bit) and this increasing prosperity has certainly very attractive to companies doing business globally.

When AFTA was conceptualised in the 1990s, it was estimated that the single market would have over 550 million consumers. Today, the potential customer base is estimated at 680 million, an attractive number for carmakers.

For carmakers, AFTA was an attractive idea and during the 1990s, a number of global players began to establish big factories in Thailand and Indonesia. These would become regional hubs for certain popular models and as there would be no import duty imposed exporting vehicles between ASEAN countries, it was as good as making them in each country. The major advantage was that concentrating production in a single factory meant bigger volumes which would provide the vital economies of scale to push production costs down and have more attractive pricing.

Groupe PSA, the French automobile conglomerate with brands like Peugeot and Citroen in its group, also looked at AFTA but didn’t see the right numbers in the 1990s, and it was also focused on China which was then a fast-growing market. However, they kept an eye on the market growth in ASEAN and in Malaysia, where their partner is Naza Corporation, Peugeot sales were growing rapidly and accounted for 86% of the volume sold in ASEAN.

Assembly operations at NAM, now majority owned and managed by Groupe PSA. (File image)

Malaysia’S Naza Automotive Manufacturing plant becomes a regional hub
The Malaysian company also had its own assembly plant in Kedah and with Naza having proven its commitment, Groupe PSA made the decision to use Malaysia as its regional hub. The decision was announced at the Peugeot World Conference in January 2010. However, planning took some time but, in the meantime, Groupe PSA began small volume production of a Peugeot model at Naza Automotive Manufacturing (NAM) as a shared operation.

Early last year, the French company acquired a majority stake in the business operations of NAM which began operations in 2004. Groupe PSA and Naza will jointly produce Groupe PSA-branded cars for Malaysia and other ASEAN markets which now has a potential customer base of 680 million. Further opportunities will also be explored beyond ASEAN, with a potential to contribute significantly to Malaysia’s economy.

Peugeot 3008 and 5008 models assembled in Malaysia will be exported to the Philippines.

First exports to the Philippines
This month, NAM will begin exporting its first shipment, a batch Peugeot 3008s, to the Philippines. “The Peugeot 3008 with the Peugeot 5008 1.6 THP are targeted to be available in the Philippines with more than 4,000 units by 2023. The Philippines is the first ASEAN country where our cars manufactured at NAM is being exported to under the AFTA,” said Laurence Noel, Head of ASEAN & CEO of Naza Automotive Manufacturing, Groupe PSA. “More cars will be exported to other ASEAN countries very soon,” she added.

Find out more about the Peugeot 3008 and 5008 at www.peugeot.com.my.

It’s evident that Proton sales this year have been growing steadily and the brand has been edging upwards on the chart towards Perodua, which has been No. 1 since 2005. Yet, Perodua remains confident that in the remaining 6 months of 2019, it will continue to maintain its strong sales and has even revised upwards its sales target for the year to 235,000 units. This is 4,000 units higher than the 231,000-unit target announced when the year began.

To put things into perspective, Perodua sold 227,243 vehicles in 2018, which was the highest annual sales achievement in its history. In the first half of 2019, Perodua sold some 121,800 vehicles – 4% more than the 117,100 units it sold in the same period last year – backed by sustained healthy demand for all its models.

Speaking to the media today, Perodua President & CEO, Dato’ Zainal Abidin Ahmad, said that from January through June this year, total bookings stood at 190,765 units, more than 3% up on the 184,949 orders collected in the same 5-month period last year.

“The increase in demand for our vehicles in the first 6 months of 2019 has had a positive impact on the automotive ecosystem as a whole, with parts purchases amounting to RM2.7 billion during this period,” Dato’ Zainal Abidin Ahmad said. “Based on our forecast for the second half of the year, we expect to purchase a total of RM5.4 billion worth of parts for the whole of 2019.

He said that Perodua is also working with the Daihatsu Motor Company of Japan to further develop its component suppliers to explore markets beyond Malaysia, and that this forms part of the company’s commitment to build Malaysia’s automotive support industries.

Second half outlook
On the outlook for the second half of 2019, Dato’ Zainal said, “There is good news in the market as the central bank has reduced the overnight policy rate, which will help in promoting consumer spending. That said, we should remember that last year there was a big incentive for consumers to buy cars with the tax holiday, which was announced after the outcome of the country’s 14th General Election.

“Based on our internal calculations, the industry has outperformed expectations in the first half of this year – Malaysia’s Total Industry Volume (TIV) has grown 2.4% to 296,800 units,” Dato’ Zainal added.

He explained that the tax break incentive had a one-off effect on the market and that consumers and automotive players alike took advantage of the situation. “With this in mind, we believe that the second half of the year will not be as healthy as what was recorded last year. The momentum of the first half is likely to reduce in the second half,” said the President and CEO.

Demand for the Aruz continues to be high and June sales were moderated to manage stocks, not that there was a drop in demand.
It was also revealed that Perodua management has given the green light to further develop the Myvi GT concept that was displayed at the KL International Motorshow last year, with a view of selling it to the public.

Working harder on exports
“We have reached a stage in our history where we are earnestly seeking to build our brand abroad in a sustainable manner. However, this is on a long-term scale as brands do need time to build. Our hope is to make Malaysia proud,” he added.

Although Perodua had, in earlier years, been exporting its cars to some markets in Europe (including the UK), the increasingly stringent exhaust emission regulations had eventually impacted the exports and the cost of meeting the regulations was too high. Daihatsu too stopped exporting its products to Europe. However, in the ASEAN region, Perodua still had a small export volume and even supplied the Myvi to Daihatsu for sale as a Sirion in Indonesia under its own brand.

Singapore is one of the markets that Perodua exports to.

At the moment, Perodua exports to 7 countries and is putting in greater efforts to enter new markets in coming years. This takes time as thorough market studies are needed and the products correctly tailored to customer needs. In this respect, the experience of Daihatsu would be useful.

Recall for the Aruz
At today’s media briefing, Perodua also announced a recall for the Aruz which affects 3,000+ vehicles manufactured before February 15, 2019. The recall is precautionary and is related to the Electronic Control Unit (ECU) managing the side airbag. This is in response to an incident of unintended inflation of the airbag in a Toyota Rush in the Philippines but it is confirmed that there is nothing defective about the airbag itself.

Perodua officials explained that the road conditions in the Philippines and also in Indonesia are rougher than in Malaysia, and could be the cause. Owners have been sent letters asking them to bring their vehicles in for the precautionary check and if needed, rectification.

Visit www.perodua.com.my to know more about the models available.

Archive

Follow us on Facebook

Follow us on YouTube