Things Happened

Yesterday, with regret, Perodua came out with a very difficult but necessary announcement. This is related to the supply of Myvi. It is rather unfortunate, during this crucial moment, one of its vendor, who is supplying a crucial component for Myvi has to stop production, resulting the stoppage of Myvi line at Perodua plant. As we speak, there is no certainty on the timing of the immediate solution on the problem though the engineers of both side, including Perodua partners in Japan are doing their best to rectify the problem.

As Perodua is already operating on lean inventory as a result of high registration and delivery over the last three months, the halt will certainly affect  customers who placed their bookings in the recent months. Over the last three months, Perodua has delivered close to 30,000 units Myvi. 

In the last few days, Perodua has managed to complete the allocations of all (verified) Myvi bookings made before 1st June 2018. That was the earlier priority for Perodua, to ensure all those customers who did their bookings prior to Tax Holiday to get their cars before the beginning of SST. Perodua also managed to start delivering some orders made in June before the supply was halted on 14th August 2018.

As its normal practice, on the 1st day of every month, Perodua's Demand Supply Improvement  (DSI) system automatically allocates to the list of customers in line due to receive their cars within the month, and the respective sales outlet will be notified accordingly. From the list issued for the August's allocation, another 3,100 customers will miss the delivery due to this incident. These are part of the customers who placed their booking in June. And now, this will be the new priority for Perodua, to ensure these affected customers, will not loose out the zero-rated GST's saving they supposed to enjoy, assuming they will only receive their cars in September when SST will be re-introduced.

In addition to that, there are another 15,000 outstanding Myvi bookings  that supposed to be fulfilled from September onwards. 

Since July, with the growing booking received for Myvi (and other Perodua models) and prolonging waiting period, all Perodua customers were advised of the tentative delivery times, presumably to be after September and at revised (higher) OTR price.

As Perodua's technical team is trying hard to resume production as immediate as possible, Perodua is also finalising the details on the compensation format to be awarded to those 3,100 customers. Rest-assured, their interest will be taken care of and matter the most to Perodua. They will be notified by their respective Sales Advisor in due course. Perodua is also looking on the other affected customers and finding the best solution for everybody. Nobody wish for the unfortunate thing to happen but THINGS HAPPENED.

There were many allegations made as a result of the revelation. Perodua would not be announcing this problem if Perodua does not really care about its customers, as alleged by some. The fact that Perodua openly admitted its problem shows that it stood strongly on its "You Matter Most"'s motto. If it is true that the disruption in production of Myvi is a ploy by Perodua to delay the delivery and to charge customers with SST, why is Perodua announcing that it is working on the compensation to the affected customers? And what is the point of Perodua delaying the delivery when the SST amount will be paid to government rather than going into Perodua's profit?

For me, as things do happened, we will take this as a good lesson learned and will continue to improve our system moving forward. What more important is to solve the problem in hand and to ensure that our customers' interest are taken care of to the very best. For now, we can only humbly apologise for our weaknesses (with deep regret).

All Time High TIV - July 2018

The Malaysian automotive market continued to experience a spike as a result of "tax Holiday" recently announced by the government. July was the second month of the three months, which GST was zero rated making the OTR prices of cars much cheaper than other normal months.

The TIV for July is expected to be around 67,810 units (pending official announcement by MAA), highest in 2018 and 3,308 units or 5.1 percent higher than the previous month. All brands recorded a growth compared to same period last year. Many also did better than a month before, especially for those that started the month with higher inventory. 

The YTD TIV until end July is expected to rise to over 357,500 units, improved by 24,500 units compared to the same period 2017. This is a reflection of almost 7.4 percent growth year on year. The market has managed to register 132,312 units during the first 2 months of this Tax Holiday, or an equivalent to 37 percent contribution to the total market thus far.

"Stock is King" continued to be the denominator during this unprecedented period. Proton already announced that they did 31 percent better than June with 8,105 units registered in July, the highest in 30 months. 

Honda also hit a new record high with 12,780 registrations, up by 12 percent compared to June 2018, which also brought it back to number two position after losing it to Toyota in the previous month.

All brands are receiving an overwhelmed bookings since 1st June and now rushing to fulfil them before 31st August 2018 when Tax Holiday will end. Although, August is still within the Tax Holiday period, but as bookings are already surpassing the normal OEMs' stocks capacity, there will be customers that will receive theirs at the beginning of SST regime.  One brand already made it to the public that they will honour the "zero-rated GST" prices post August. Few others, has quietly disseminating that they will honour at half of the GST amount during its delivery in September, whilst the rest are still simulating the impact. Volume seller OEMs will have tougher time in deciding the approach as it will involve a bigger subsidy in total.

Perodua recorded a whopping 23,830 units for the month of July 2018,  4,219 units or 21.5 percent higher than June. Its July's registration has also became the monthly highest for 2018 after surpassing its 21,980 units recorded in May.

During its session with the media on 2nd August 2018, Perodua announced its 2018's 1st half performance, which includes the 17.5 percent growth in car registration. Perodua has sold 117,000 cars from January to end of June 2018, with Perodua Myvi contributed almost 41 percent and followed by Axia, Bezza and Alza at 29, 19 and 11 percents respectively. Until end June, Perodua hold a 40. 6 percent market share in Malaysia automotive market.

For me, the unexpected Tax Holiday has created a new phenomena to the industry. Public is taking full advantage of cheaper car prices market is offering. Hopefully, these 3 months superb performance by all OEMs will generate enough volume to cover the "expected slow down" from September onwards. Or, perhaps, there will be no slow down after all? Who knows?