PETALING JAYA: Bermaz Auto Bhd (BAuto) sees a smoother road ahead on the back of the sales and service tax (SST) exemption extension to June 30, 2022 as well as an overall increase in demand, according to its executive chairman, Datuk Seri Ben Yeoh.
“The continuation of the SST exemption for vehicles will create demand, especially now that people are concerned about travelling on public transport. So, there is a shift into individual mobility, then it will drive demand for small vehicles and the used-car market,” he told the media following the launch of Peugeot 3008 and Peugeot 5008 SUVs on Wednesday.
Bermaz Auto Alliance Sdn Bhd is sole distributor of the Peugeot brand in Malaysia.
With the rosy outlook, Yeoh hopes the group will be able to maintain the four-figure sales achieved last month, similar to its pre-pandemic levels, in the next couple of months. Nonetheless, he acknowledged that business is not all smooth sailing as it faces supply constraints.
“We are practically in a selling hand-to-mouth situation but we will be stepping up.”
Yeoh elaborated that the Covid-19 pandemic has resulted in the shutdown of its plant, which affected its completely knocked down (CKD) operation, which accounts for 70% of the group’s sales, placing pressure on its inventory. This is further exacerbated by global logistics issues, such as getting containers, but he believes these challenges will iron themselves out as the global economy normalises.
The BAuto executive chairman pointed out that the waiting time for its CKD units has come down to one month at the moment and is not too far from the ideal waiting time of one week.
“As a whole, with the SST exemption extension, the coming festive season and the opening up of the economy, the mood is right for economic activity.”
On the subject of electric vehicles (EV) and tax exemption laid out by the government in Budget 2022, Yeoh sees it as the first step in embracing the industry’s direction towards carbon neutrality.
While this might be a small step, he believes this will drive a change in the industry, creating opportunities for those who are environmentally conscious and creating a supporting industry focused on the electric and electrical sector as the EV segment has different technology altogether.
“All of us, at some point of time, will introduce some EV products, basically to acquire the technology, knowhow and to upskill our own human capital to prepare for the next generation vehicle,” said Yeoh.
Personal preference aside, he pointed out that everyone is working on EV, therefore it has to follow suit and assess the situation.
“There may be a lot of mushrooming industries coming up as a result of this as EV is easier to produce, as it has less componentry, less heritage and legacy issues, as well as less challenges in terms of intellectual property (IP) rights as there is little registration of IP in the electronic industry.”
Yeoh is confident the 3008 and the 5008 will meet customers’ expectations.
However, he said there are legacy issues that have developed over the years and affected the Peugeot brand image, noting that consumers are very cautious and the group has to rebuild confidence in the brand.
“Customer expectations over ownership experience and cost of ownerships are the issues that we have to address. I think our focus will be on this area before we really push volume sales,” he added.
