Perusahaan Otomobil Kedua Sdn Bhd (Perodua) has set a sales target of 202,000 units for 2017, a contraction of 2% from the 207,100 units recorded in 2016, amid a continuous challenging economic environment.
President and Chief Executive Officer Aminar Rashid Salleh said despite a 3% contraction in sales performance for 2016 as compared to the initial target of 216,000, market share last year grew to 35.7% from 32%, the company’s highest on record.
On the total industry volume (TIV), Perodua sees a slight improvement to the market with 2% growth to 590,000 units this year, from 579,600 in 2016.
“Based on this projection, we target to capture 34% of the market share or sell surpassing the 200,000 mark at 202,000 vehicles in 2017,” he said at the Perodua 2016 Performance Review in Kuala Lumpur today.
Aminar said Perodua’s conservative sales target for 2017 will translate into a decline of 1.5% in market share.
“Under very tough market conditions and probably because other players also face challenges, the industry’s TIV for last year contracted 13%, but we dropped just 3%.
“We forecast the market to continue to be tough this year as shown in the number of bookings and as competition also gets tougher,” he added.
He said if for any reason there was an improvement in the economic indicators, Perodua would review upward, the target for the year.
Despite the tough sales environment locally, Aminar said Perodua grew export volume by 6% last year to 4,700 units from 4,400 in 2015, with 63% being to Indonesia.
On the profitability strategy this year, he said Perodua would focus more on after sales for revenue growth.
On capital expenditure (Capex), Aminar said Perodua’s spending would be higher at RM557 million this year, compared to RM492 million in 2016, aimed at improving equipment, process flow, and improving productivity at current plants as well as improving the network.
On the impact of the weakness in the ringgit, Aminar said it had an effect on costing.
“We do import parts in the US dollar and yen. However, it is somewhat mitigated by our higher localisation.
“We will continue to monitor the situation. At this point, we are continuing to absorb (the weaker ringgit’s impact) and have no plans to review prices,” he added.
Aminar also shared that 2017 marked the beginning of Perodua’s new Transformation 2.0 programme, a five-year roadmap from 2017 to overcome future challenges and the economic environment.
“Our vision is to be a leading affordable automotive brand regionally with global standards,” he said.