Perodua braces for challenges

By EUGENE MAHALINGAM | 19 January 2015

PETALING JAYA: Despite gearing up for record-high sales this year, Perusahaan Otomobil Kedua Sdn Bhd (Perodua) is bracing for a challenging 2015.

According to Perodua president and chief executive officer Datuk Aminar Rashid Salleh, there will be a number of “key success factors” that will determine the performance of the national carmaker this year.

One of the biggest challenges for Perodua is that its customers don’t get their loans approved – this is especially the case for many of its entry models.

Since 2012, this issue has been compounded by Bank Negara’s responsible lending guidelines, whereby loans are approved based on net income compared with gross income previously. The impact has been the highest for the company’s Viva models, especially the entry level ones, whereby rejection rates ranged between 40% and 45%.

The Viva has been replaced by the Axia, which, according to Aminar, has not been impacted greatly by loan approval issues.

“This is because most of the purchasers are additional car buyers, who don’t have no credit issues,” he said at a briefing last week.

According to Aminar, many of the Axia buyers already have a primary vehicle, and are buying it for their children or using it as a secondary car.

Additionally, he said the company would not be affected by higher foreign exchange.

“Our exposure is more in terms of the yen, rather than the US dollar. Furthermore, the localisation level of our models is also quite high,” said Aminar.

He also said healthy gross domestic product (GDP) growth would be a key success factor for Perodua vehicle sales to remain steady this year. At Budget 2015 last year, the Government had projected GDP growth of between 5% to 6% this year.

Aminar also said Perodua would strive to ensure its vendor network continue to remain strong, and that its supply chain would not be disrupted.

The national carmaker has allocated a capital expenditure of RM632.1mil from RM1.32bil in 2014, to improve its production facilities.

Perodua has set a year-on-year sales target growth of 6% to 208,000 units for 2015, its highest ever, underpinned by continued strong demand for its Myvi and recently launched Axia models.