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Monday, September 04, 2006

Perodua to enter used-car biz

Perusahaan Otomobil Kedua Sdn Bhd (Perodua) will venture into the used- car business in about a year to complement its car manufacturing business, its managing director Syed Hafiz Syed Abu Bakar (pic) said.

“We have been studying the used-car business over the last one year and I have made several trips to Osaka and Tokyo to look into their second-hand and vehicles auction concept that draws international buyers,” he told FinancialDaily in an interview.

He said the venture into the used-car business is a natural progression for Perodua. “In the matured markets, you will see the same thing happening in Malaysia, there will be fewer and fewer first- time buyers of new cars,” he said.

However, Syed Hafiz believes that the timing is not right at the moment for the company to launch its used-car business, especially with the high overhang of second-hand cars and non-performing loans (NPLs).

“Give it another year for things to subside (overhang and NPLs). Then we have to enter that area in a proper manner with adequate stock and certification for the vehicles,” he said.

He said the company will deal both in Perodua and non-Perodua models in its used-car business, especially to cater to customers who want to do trade-in.

Syed Hafiz said Perodua will not affect the business of other used-car dealers as there is only up to a certain capacity it could handle.

“More importantly, we want to give our customers quality assured vehicles with proper certification instead of just facilitating the selling of our new cars. That would also help stabilise the prices of the used cars,” he said.

On another note, he said Perodua will be exporting its Myvi to the UK starting from next month with a total 500 units targeted until the end of this year. It is expected to be retailed at about £7,900 each (RM55,170).

Prior to this, Perodua had exported its Kelisa to the UK market.

“We will also be exporting the same model to Indonesia — 300 to 500 units a month depending on the situation in the country — starting mid-2007, once we clear the backlog orders from the domestic market,” Syed Hafiz said.

Myvi is Perodua’s top selling model with 85,000 units on the road since its launch in May 2005.
Perodua had to ramp up its production of the Myvi several times in the past one year from 3,000 units to close to 8,000 units monthly now.

“We expect 100,000 units of Myvi to be on the road by the end of October,” he said.

The overwhelming demand for Myvi and other models helped Perodua to take pole position in the number of vehicles sold in the first half of this year.

Perodua had a 32% share or 79,700 units of the total industry sales volume of 248,407 units from January to June 2006.

In the passenger car segment, which had 184,725 units sold, its market share surged to 42%, of which 22 percentage points came from Myvi.

“The 79,700 units achieved in the first half of this year was 24% higher than the 64,300 units achieved last year,” Syed Hafiz said.

He said its management has revised upwards its target of car registration from 155,000 units to 158,000 units this year from 139,000 units in 2005 after its recent tour of the country.

“We are not much concerned whether we are number one or not. From last year we started focussing on what we want to do,” he said.

Syed Hazif said Perodua will continue with its policy of introducing one new model every year from last year until 2010 with the exception of this year due to the long waiting list for Myvi.

It has managed to reduce the waiting period for Myvi from five months to three months currently.

Perodua has also embarked on a RM300 million expansion of its plant in Sungai Choh, near Rawang, to boost its annual production capacity to 205,000 units by year-end and to 240,000 by the third quarter of 2007 from 200,000 units now.

Syed Hafiz said Perodua will also build five more branch showrooms, one each in Seremban, Melaka, Penang, Kota Damansara and the Kajang-Bangi area, bringing the total to 40. It has 139 dealers nationwide.

The five new showrooms plus two signature showrooms in Kuching and Johor Bahru will cost a total of RM15 million to RM20 million.

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