Perodua To Invest RM1.3 Billion In 2022 On New Model, Operational Improvements,...

Perodua To Invest RM1.3 Billion In 2022 On New Model, Operational Improvements, R&D

Perodua is setting a high target for itself this year by projecting a sales target of 247,800 vehicles. In comparison, the company soldĀ 190,291 vehicles in 2021, which was short of its revised target of 200,000 cars. This was due mainly to many factors which disrupted not only production activities but sales as well. The waiting list for vehicle delivery has also grown longer due to the same factors. As such, the company is taking action to make up for this shortfall in 2022.

Perodua_Executives_ReviewThis year, it hopes to improve its market share from 37% to 41%; Total Industry Volume (TIV) for 2022 is estimated by Perodua to be 610,000 vehicles. To achieve this, it will need to increase its total production volume to 265,900 vehicles, a 37.5% jump. In contrast, its production volume in 2021 was 193,400. This will involve tact up activities to reduce production time, additional overtime hours as well as weekends.

In effect, this is also good news for its vendors as a higher production rate will increase demand for locally sourced components. Perodua is expecting to increase its purchase of locally sourced parts by 41.5% to RM7.5 billion (up from RM5.3 billion in 2021), which will help to grow the local automotive ecosystem.

Perodua Smart Drive Assist_MyviThe Myvi is still the company’s bestseller and its demand is expected to remain strong in 2022, particularly with the recent model update. Since its launch in November, Perodua has delivered 7,055 units of the new Myvi and has secured over 31,000 orders. For 2021, Perodua sold 47,525 units of Myvi. This was followed by Axia (43,080), Bezza (42,698), Ativa (26,847) and Aruz (15,313). The company registered 14,828 units of Alza last year, and as there are still buyers for it, production will continue until demand is fulfilled.

As you may have heard through the grapevine, Perodua is looking to launch the new Alza this year. You can have a look at the Indonesian version of Daihatsu Xenia to have an idea of what we’ll be getting. Perodua has allocated about RM529 million on the new Alza’s development.Daihatsu Xenia

Included in its budgeted investment for the year is also RM320 million for improvement to its production facilities and related transformation programmes. Meanwhile, physical infrastructure such as buildings and roads etc will cost about RM380 million. It is also expecting to invest some RM95 million into R&D and digitalisation initiative. This will encompass work on electrified powertrains as well as digital and connectivity offerings for its vehicles as well as its dealerships. The company will also focus on improvement its testing facilities, including its test track which is upgraded to WLTP (Worldwide Harmonised Light-Duty Vehicle Test Procedure) standards.

Perodua_Test TrackThese improvements are done mainly to enable it to develop products for the domestic market, as well as make certain facilities (National Digital Centre, National Emission Test Centre, test track etc) available to the other players in the industry. It also has its sights on being an R&D hub for the ASEAN market. Enhancing the local ecosystem would also allow Perodua to manage supply chain issues better, as it had learned after its experience with the lockdowns in 2020 which disrupted supply from foreign vendors.

“We have learnt a lot from this situation and have incorporated effective countermeasures to ensure that we will be able to face them better if they reoccur,” said Dato’ Zainal Abidin Ahmad, Perodua President and Chief Executive Officer.

“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 added.

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