Perodua lowers sales, market share targets for 2017

KUALA LUMPUR: Perusahaan Otomobil Kedua Sdn Bhd (Perodua), which sold over 207,100 vehicles in 2016 with a record market share of 35.7%, has lowered its targets for 2017.
The national carmaker is aiming for a 34% share of the market this year by selling 202,000 vehicles, amid challenging market conditions and tougher competition.
President and CEO Datuk Aminar Rashid Salleh said the market was challenging in 2016 due to consumers adjusting to tough economic conditions, prudent lending guidelines and stiff competition among auto players.
“The market will continue to be tough (this year), at the same level as 2016 or tougher, as shown in the number of bookings,” he said at the Perodua 2016 Full Year Review and Chinese New Year luncheon with the media here yesterday.
“Competition is tougher, every one (auto players) wants a piece of the pie,” he added.
For 2017, Aminar foresees production to be reduced to 197,000 units, from 213,000 units in 2016, which is reflective of its sales target for the year.
Perodua yesterday outlined a five-year plan called “Transformation 2.0” for 2017 to 2021 with a vision of becoming a leading affordable automotive brand regionally with global standards.
Aminar said the import of parts is in US dollars and yen, which have an impact on the company with the weakening of the ringgit. These are precision components that it cannot localise, such as engine and electronic components and metallic paint.
“Our localisation is relatively high (over 90%). We mitigate it (high import costs) with higher localisation.”
For the time being, Aminar said, Perodua continues to monitor currency fluctuations and, in a way, is absorbing the costs.
“At this point, there has been no indication or decision to review prices. We will hold on (to existing prices) as long as we can and hope that it (US dollar) will weaken in the later part of the year.”
Perodua has allocated a capital expenditure of RM492 million for 2017, 26% higher than last year, to be invested to modernise its Perodua Manufacturing Sdn Bhd plant and to upgrade its sales and service network.
Perodua will also focus more on its after-sales business for revenue growth.
Aminar said despite 2016 being a challenging year, all its models, from the Bezza to the Alza, are number one in their respective catagories.
Perodua, he added, is still in the learning stage of exporting its vehicles and is identifying potential countries for export. It exported 4,700 vehicles in 2016, 6% higher than in 2015, with over 60% going to Indonesia.