Published on January 22nd, 2019 | by Subhash Nair0
Perodua Commits to Increase Component Purchases by 20%
The Perodua Vendors Club, more commonly known as KVP, lauds Perodua’s commitment to increase its automotive component purchases by 20% to RM6 billion this year from RM5 billion in 2018 despite the small 0.21% total industry volume growth projected by the Malaysian Automotive Association (MAA).
Perodua President and Chief Executive Officer Dato’ Zainal Abidin Ahmad announced this commitment during the launch of the Perodua Aruz last Tuesday. At the same event, Dato’ Zainal also announced that 95% of the Perodua Aruz’s components were locally-sourced.
“We are in full support of Perodua’s commitment to increase its component purchases notwithstanding MAA’s forecast of a marginal total industry volume increase this year. This commitment will further help strengthen our position as we look forward to expanding together with Perodua,” KVP President En Musa Zahidin Ahmad Zaidee said.
Musa also added that many of the KVP members were involved in the development of the Perodua Aruz and are now supplying the model’s components. According to MAA, Perodua sold 227,243 vehicles, capturing 38% of the total industry volume in 2018. On a year-on-year basis, Perodua’s annual sales increased by 11% from 204,867 units in 2017.
Musa said that the KVP is also appreciative of the guidance and assistance Perodua has provided over the years to its 138 members.
“Among the key ways Perodua has assisted us is by providing shorter payment terms to our members who were affected by the acute reduction of local component purchases that began in 2014,” Musa said.
Perodua has also improved the vendors’ financial efficiency by purchasing tooling directly from international makers, eliminating the need to acquire financing. In addition to the financial assistance given by Perodua, Daihatsu Motor Company of Japan has also played a critical role in helping local vendors and has recently appointed at least two local vendors to be part of its global supply chain.
Daihatsu has also given its commitment to continue to support Perodua and its local vendors as Perodua looks to the Asia-Pacific region for growth, Musa said.