Kia Corporation to cross the 4-million mark in global sales by 2026, with 25% of the volume made up of electric vehicles (EVs) as its long-term strategy focusses on electrification. By the end of the decade, the Korean carmaker which is part of the Hyundai Motor Group, aims to achieve an annual sales target of 4.3 million units.
It also plans to become a leading EV brand by raising the proportion of electrified car sales to 55% (2.38 million units) in 2030. This is a 7.5% (300,000 units) increase from the 2030 target announced last year, while the global sales target for electrified vehicles has increased by 15.5% (320,000 units).
After two difficult years with disruptions caused by the COVID-19 pandemic, and then the global semiconductor shortage which started last year, Perodua is looking towards a stronger recovery in 2022. The Malaysian carmaker delivered 190,291 vehicles in 2021 – 13.6% lower than the volume reported in 2020 – but has set a target of 247,800 units for this year.
Speaking to the media during the annual press conference today, Perodua’s President & CEO, Dato’ Zainal Abidin Ahmad, said that this volume would amount to around 40.6% market share, based on Perodua’s own forecast of 610,000 units which is a bit higher than the 600,000 units forecast for 2022 by the Malaysian Automotive Association (MAA) recently. In 2021, Perodua, as market leader again, had a 37.4% market share.
Perodua President & CEO, Dato’ Zainal Abidin Ahmad.
Production target of 265,900 vehicles
With the target set at 247,800 units, Perodua plans to produce 265,900 vehicles during the year, which is 37.5% higher compared to 193,400 vehicles produced in 2021. The number is higher as the company produces extra as ‘buffer stock’ in case there are disruptions in production. The increase in production would also result in an increase in locally-sourced automotive parts by 41.5% to RM7.5 billion as compared with the RM5.3 billion purchased in 2021.
Commenting on the performance of 2021, Dato’ Zainal said the year was challenging as the country and its main industries had to cope with various crises throughout the year. “Demand remained strong for all our models with the Myvi leading the list with 47,525 units, followed by the Axia with 43,080 units, Bezza with 42,698 units, Ativa with 26,847 units, Aruz with 15,313 units and the Alza with 14,828 units,” he said.
The Myvi continued to be the bestselling model for Perodua and also the bestselling car in Malaysia in 2021.
Dato’ Zainal explained that the sales tax exemption initiative introduced by the government is still an excellent incentive for the consumer to purchase new cars. It was extended until June 30, 2022 and Perodua is hopeful that it might be extended again, which would have a positive effect on sales.
“Our order book for new vehicles is still quite healthy with the guarantee that the production will go uninterrupted will mean that we could fulfil the outstanding orders in a timely manner,” he said, adding that assurances by the government that the measures of containing the pandemic is showing success that another lockdown would not happen.
“With that being said, we have learnt a lot from this situation and have incorporated effective counter-measures to ensure that we will be able to face them better if they re-occur,” he said.
Over RM1 billion investment
During 2022, Perodua’s investments will go pass the 1 billion ringgit mark to RM1.326 billion. The development of a new model will take the biggest chunk of RM529.1 million, with improvements to manufacturing facilities and processes taking RM321.3 million.
It’s almost certain that much of the RM529.1 million allocated for new model development will be for the next generation of the Alza which has been around since 2009. It’s still a popular MPV, with almost 15,000 units sold last year.
Perodua will also spend RM46.6 million on digitalization which it sees as being very important in view of trends that show consumers making more use of online and digital services. This will encompass the entire company as well as its dealers and vendors and for customers, the initiative will be seen in the development of a Connected Vehicle as well as e-Manuals and more extensive use of online communications.
The digitalization move will also see the retail network being changed. Just as the banking industry has seen a steady reduction in branches over the past 10 years, Perodua’s outlets will also be adjusted accordingly. Nevertheless, physical showrooms will still exist even though online channels have been made available for communications and sales enquiries.
Upgrading dealerships
Additionally, the existing 1S/2S outlets will be upgraded to 3S outlets that provide a full range of sales and aftersales services to customers. Perodua is encouraging the small dealers to have a more entrepreneurial attitude and develop their businesses further so they can enjoy greater success. In fact, there is a special programme for this which 56 dealers are participating in to learn entrepreneurial skills, knowledge and business survival.
Exports over the past two years have been minimal due to the pandemic and as some of the overseas markets remain closed, no vehicles have been sent. However, some shipments have been made to Singapore, Brunei and Indonesia though they have been small in number. The company is interested in exports but not as a primary business. It also wants to ensure that wherever it exports to, it will have a proper understanding of market conditions and customer requirements to ensure that the products are right and can be well accepted.
Perodua hopes to eventually be given the role of a regional hub for Daihatsu’s R&D activities for the ASEAN region. Since the 2000s, it has built up its capabilities and can now handle full upper body development on its own.
Aiming to be regional production hub
While Proton has stated its aim to be a strong regional player in time to come, Perodua is aiming to become a regional hub, not in vehicle sales but in R&D. Since it started in 1993, it has been steadily building up its R&D capability which accelerated when the 2000s began. Its involvement in the development of the first Myvi, which was jointly developed with Daihatsu and Toyota, was a great opportunity to learn and today, Perodua has full capability for upper body development.
It has been given increasing responsibilities by Daihatsu in development work for ASEAN products and Perodua personnel have even been assisting Daihatsu in Indonesia in some product development work. Dato’ Zainal said that it is possible Perodua could eventually become the R&D hub in ASEAN for Daihatsu. This would be something like Toyota having moved its R&D activities for the Hilux out of Japan to Thailand (although in that move, it was to its own subsidiary).
If Perodua offers electric vehicles, it will make sure they are affordable as its mission has always been to provide Malaysians with affordable mobility.
Perodua EVs?
On the move towards electric vehicles, Dato’ Zainal sounded positive towards the aims of the government to shift towards electrified vehicles in the effort to address climate change. However, Perodua is still studying the matter to determine what approach to take and is having discussions with Daihatsu as well. “What is important is that if we offer electric vehicles, they must be affordable for Malaysians as that is what Perodua has always strived to do,” he said.
Manufacturing technology in the Japanese auto industry has been constantly improving, enabling carmakers to deliver products that are of higher quality. Initially, the technologies were used in Japan but with the globalisation of the industry today, factories all over the planet also serve as production hubs for certain models, so they too need to have the best technologies for making their vehicles.
In view of this, Nissan will make a substantial investment in advanced technologies and equipment for its factories around the world. Following an initial investment of about 33 billion yen at the company’s Tochigi Plant in Japan, the technologies will be rolled out across factories globally.
Necessary for new generation of vehicles
These innovations will help deliver a new generation of electrified and intelligent automobiles (like the Nissan LEAF pictured above) that embody the company’s Nissan Intelligent Mobility vision, while also making production operations more flexible, efficient and sustainable. This latest investment represents a necessary rethinking of conventional car-making and tackles the structural and technical challenges of producing vehicles that will lead the industry in a new era of electrification and intelligence.
“We’re facing an unprecedented evolution in the capabilities of our vehicles,” said Hideyuki Sakamoto, Nissan’s Executive Vice-President on charge of manufacturing and supply chain management. “Our job is to make this evolution a reality by rethinking how we build cars. This will also mean shifting the efforts of our expert technicians from techniques they’ve already mastered to new, unexplored areas.”
Building the future of mobility
Nissan’s next generation of cars will be electrified, intelligent and connected. They will be ‘electronics-dense’ and use many materials which are new. This adds new complexity to design and construction, requiring major advancements in production engineering.
One such advancement is the Universal Powertrain Mounting System (shown above) developed by Nissan’s Production Engineering Research and Development Centre. Mounting powertrains in cars is a lengthy process and strenuous work for assembly line staff, who must install multiple components in sequence. Nissan’s new system uses an automated pallet to mount the entire powertrain at once.
The system measures the car’s dimensions in real time during mounting, and the pallet makes micro-adjustments accordingly. This ensures that powertrains are installed to within a small fraction of a millimetre’s accuracy. The new system is also highly adaptable. The same pallet can mount three types of powertrains (internal combustion engine, e-POWER and pure electric), and can assemble and mount 27 different powertrain module combinations.
Bringing craftsmanship to robots
Robots have the advantage of high-speed production and consistent quality, enabling faster and higher output of vehicles. However, they are not so good when there are variations and Nissan has developed certain specialist skills and processes that, until now, could only be performed by trained craftspeople. Through an intensive collaborative process, Nissan’s craftspeople and engineers have digitized parts of these delicate processes and ‘trained’ robots to perform them around the clock. This will allow the craftspeople to focus on new, unexplored areas of expertise.
Making better workplaces with robots
When robots were first used, one of the benefits was that they could do jobs that were dangerous or strenuous for humans, like welding body parts together. Robots can perform such tasks efficiently, freeing workers to perform more valuable jobs elsewhere on the line. This also improves ergonomics, making factories easier places to work.
One example is the installation of a headliner, the overhead layer of material on the inside of a car’s roof. Workers must enter each vehicle’s cabin to perform this physically demanding job. The task has become even harder as cars come with more connected features, adding to the number of devices in and around the headliners.
Nissan’s solution is to use robots to insert the headliner through the front of the vehicle and then fasten it. Sensors monitor changes in pressure and use a proprietary logic system to determine when the clips have snapped securely into place.
Lower environmental impact
Nissan is also working to reduce the environmental impact of building cars. Changes in the painting process are especially noticeable. Car bodies must usually be painted at high temperatures because the viscosity of paint is hard to control at lower temperatures. By contrast, bumpers are made of plastic, so they need to be painted at low temperatures. This requires two separate painting processes for one vehicle.
Nissan has developed a water-based paint that maintains the right viscosity at low temperatures, so that bodies and bumpers can be painted together. This will cut carbon dioxide emissions from the process by 25%. Nissan will also use a water-free painting booth that makes it possible to collect all waste paint and reuse it in other production processes.
“These new technologies and innovations are at the heart of the company’s competitiveness,” said Sakamoto. “They will be rolled out globally in the coming years, underpinning the future of Nissan Intelligent Mobility and reinforcing our status as a leader in technology.”
In the early years of the auto industry, the factories that produced cars and the parts for them were once confined only to the countries that the manufacturer was established in (BMW in Germany, Toyota in Japan, Ford in the USA, etc). However, as the auto industry rapidly expanded around the globe and cars were being sold in other countries as well, it made sense to produce them closer to the markets. And from the 1960s onwards, as more countries began industrialising – like Malaysia – incentives were also offered to carmakers to invest in local production.
Globalisation of the industry has led to factories being set up all over the world, some to serve a few markets and some as production hubs for regions or even the entire world. The need to have huge volumes for economies of scale that drive down costs is one reason for this approach. There are also political considerations which come into play as exports of vehicles from one country to another need to be ‘balanced’.
While the construction of new factories to make vehicles is ongoing, there is now a wave to establish factories to supply parts and systems for the coming era of electrification. The next decade will see a leap in hybrid and electric vehicles and demand will be great, so the factories must start up now in order to be able to meet that demand.
Incentives matter as well as policy clarity and stability
Choosing a country to build a new factory requires not just careful planning but also consideration of the incentives offered by the government. The investments and job opportunities as well as export potential are also attractive enough to governments to offer investments to attract carmakers. Clarity and stability of automotive policies is also important as carmakers plan over many years and they need to be assured that changes are not made just because a new minister has taken over and had other ideas about the direction.
Thailand has been good at policy stability, which is probably on reason why a number of global players built their production hubs there. Changes of government may occur but policies are maintained and that’s what matters.
BMW chooses Thailand
Following on from BMW Group Thailand’s earlier endorsement for incentives by Thailand’s Board of Investment (BoI) for a 700 million baht (about RM96 million) outlay in BMW plug-in hybrid electric vehicle (PHEV) production, the company has jointly invested with DRAXLMAIER Group in this battery assembly plant, worth 500 million baht (about RM69 million).
“This new beacon for e-mobility innovations will further unlock the competence of Thailand’s automotive industry. The incentives from BoI also symbolize the unity between the public and private sectors in this undertaking towards a sustainable future,” BMW notes.
BMW Group Thailand has thus marked another historic milestone with the inauguration of a local high-voltage battery production plant in partnership with the DRAXLMAIER Group, one of the world’s leading automotive suppliers and a partner of BMW Group since 1966. BMW Group Thailand launched the local assembly lines in July 2019 at the plant in WHA Chonburi Industrial Estate 2. The high-voltage battery assembly plant is assembling both battery modules and the battery itself.
Uwe Quaas, MD of BMW Group Manufacturing Thailand said: “One of the pillars of BMW Group’s global strategy is electrification, and BMW Group Manufacturing Thailand is underlining its commitment to this mission by taking another big step forward in our electro-mobility strategy. The start of local battery production enables us to better respond to growing domestic demand for electrified vehicles in Thailand. This new capability also strengthens the performance of Plant Rayong in fulfilling the country’s mission of sustainable mobility.”
Fully trained workforce
The high-voltage battery is a central element of partially and fully electrified vehicles and a highly sophisticated component that requires specialized skills to produce. Thanks to the advanced training and qualification programs initiated in September 2018, the staff from the DRAXLMAIER Group who have participated in the battery production training program at BMW’s Group Plant Dingolfing – the BMW Group Competence Centre for e-drive production – and the BMW Group pilot plant for e-drivetrains in Munich, are now ready for the high-tech assembly work to produce the latest generation (Gen4) of the BMW Group high-voltage batteries
This involves the use of cutting-edge production technologies onsite including laser welding, plasma activation, robotics, gluing, automated optical and electrical inline quality inspection along with end-of-line testing. The training is also focused on supporting a highly automated process, which is an important part of battery module production, as well as comprehensive quality assurance, product methodology and technology, rework, and analysis.
World-class standards and quality
Equipped with a strong grasp of battery production skills, the staff will work on battery cells provided by a supplier in the Asian region along with other imported parts – such as aluminium housing, electronics, and cables – to roll out high-voltage battery packs that meet BMW Group’s world-class standard and are in full compliance with Thailand’s local content requirement regulation.
Completed battery packs will then be transported to Plant Rayong for the production of the entire range of BMW 5-Series Plug-in Hybrid Vehicles, which has been in operation since July 2019. Since 2017, BMW Group Manufacturing Thailand has assembled four BMW plug-in hybrids at Amata City Industrial Estate, Rayong province.
