Perodua to ramp up production capacity this year to fulfil order backlog - MIDA | Malaysian Investment Development Authority
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Perodua to ramp up production capacity this year to fulfil order backlog

Perodua to ramp up production capacity this year to fulfil order backlog

31 Jan 2023

Carmaker Perusahaan Otomobil Kedua Sdn Bhd (Perodua) intends to maximise its production capacity to 330,000 units this year from 282,019 units last year (14.2% higher) to fulfil outstanding orders carried forward from 2022 and to meet demand so far in 2023.

Perodua president and CEO Datuk Seri Zainal Abidin Ahmad said it has 220,000 units of outstanding bookings and is facing difficulties in managing operations because it has reached maximum capacity due to high demand.

“Perodua has earmarked RM10 billion to purchase parts from local suppliers to meet our 2023 targets. Hopefully by maximising our production to 330,000 this year, we will also be able to fulfil our average normal orders,” he said during the Perodua 2023 Outlook Media Conference in Kuala Lumpur today.

In addition, Perodua is targeting sales of more than 314,000 units this year, or 11.3% higher than the preceding year’s 282,019.

Currently, the normal installed annual production capacity for Perodua Manufacturing and Perodua Global Manufacturing plants is at 320,000 units on a two-shift cycle, and Zainal said it can increase the volume by improving productivity and by instituting overtime.

He said the impact of such production growth on the Malaysian automotive industry would be significant as Perodua purchase commitment is expected to encourage the Malaysian automotive ecosystem to improve its production capabilities and quality standards.

“In short, the increase in production will give a much-needed boost for our local industries to improve economies of scale and to better compete with counterparts abroad,” he added.

Zainal also affirmed that Perodua will make sure customers who booked vehicles during the National Economic Recovery Plan (Penjana) scheme period and are supposed to get their orders by March 31 will still be able to enjoy the sales and services tax (SST) exemption intended for them.

Based on the waiting period for most brands, as well as the still strong demand for Perodua’s vehicles, Zainal said, total industry volume (TIV) has the potential to reach 700,000 units this year.

“In terms of the overall market, we believe that there is still a bright silver lining for the industry despite the cost pressures. We believe that the TIV can go beyond the 650,000 units announced by the Malaysia Automotive Association,” he added.

Perodua, he said, will not increase the prices of existing models but there will be some price increases for newer models due to new and enhanced specification features rather than due to the impact of inflation or higher material prices.

Perodua has allocated RM1.15 billion in capital expenditure this year to improve its group operations. One key area for improvement is its new business division where Perodua is expanding its Pre-Owned Vehicle and Subscription business.

“We have allocated RM537.1 million for the development of multiple new models that we are planning to launch in 2024 and 2025. In addition, we will allocate RM247.1 million to modernise operations, which also includes upgrading existing 1S (sales showroom) and 2S (service and spare parts centres) into 3S centres (a combination of the two),” he said.

With these improvements planned for its network, Perodua is targeting an increase in its vehicle intake at its service centres.

“For 2023, we target to see an increase in vehicle intakes to 2.8 million units from 2.6 million recorded in 2022. This growth would be a combination of improved service time as well as increasing our service bays throughout the country,” said Zainal.

Source: The Sun Daily