"Together, We Are One"

Last Friday (19^th January 2018), Perodua, during its 2017 Performance Review with Media, has officially announced its 2017’s result and the projection for 2018. 

In summary, the scorecard for 2017 were: 

• Registration was 1 percent lower than 2016 at 205,000 units and 1.5 percent better than target of 202,000 units.
• Market share was 0.1 percent lower than 2016 at 35.6 percent.
• Service Intake was 3 percent better than 2016 at 2,100,000 units.
• Service Revenue went up by 12 percent against 2016.
• Parts and Accessories sales were 7 percent higher than 2016.
• Production was down by 6 percent against 213,000 units produced in 2016.

*TIV was calculated at 576,000 units, 0.7 percent lower than 2016 (pending official announcement by MAA).

After Sales Service has shown positive improvement in all areas, including Intake, Revenue, Parts and Accessories, as well as Body and Paint business. Through strategic efforts and initiatives, the After-Warranty ratio increased to 26 percent compared to 23 percent in 2016. Body and Paint business continue to grow by 10 percent, year on year.

Perodua’s Pre Owned Business (POV) has also shown an improvement with trade in volume increased by 15 percent as compared to 12 percent in the year before. Wholesale volume expanded by 10 percent from 4,890 units recorded in 2016.

Moving forward, Perodua is positive with the outlook of 2018, aiming to keep its market share at least at 35 percent with additional 4,000 units or 2 percent growth in registration over 2017. Similarly, Perodua is targeting a 3 percent growth in Service Revenue, 2 percent growth or 2,140,000 units Intake and an increase of 8 percent in production to 215,000 units.

Perodua will continue to expedite the delivery of the 36,000 bookings collected for its new Myvi. This, together with growing popularity of its compact sedan, Bezza and ever strong Axia will drive the expected growth. Perodua is also being cautious of growing competition especially in A and B segments as well as on the more stringent Hire Purchase approval to be imposed by all banks as a result of persisting higher household debt ratio.

For me, as in Delta Goodrem’s song, “.. see what we have become, Together We Are One ….”, and again this year, we will “go higher”, InsyaAllah.

"Cuti Peristiwa" and TIV

Holiday is something almost everybody will look forward. Ad hoc or additional holiday, or “Cuti Peristiwa” as we now getting used to, is even more interesting. Previously, I wrote about how December 2017 were shorter by 2 working days compared to December of any other year before. Some might ask, so what? It is just one or two days lesser.

To public at large, it was nothing. To the automotive industry, especially on market side, it makes lots of different, especially from the perspective of the TIV. Scheduled public holidays are not too bad, but the unplanned holiday could be quite damaging to Sales, especially if it is too often and if declared just before or after the weekend.

In 2017, there were two months that went with these Cuti Peristiwa. First was in April and  second was in September. Trend-wise, the first three months of 2017 was far better, with TIV of almost 141,000 units compared to 131,500 units during the same period in 2016. However, the following three months of 2017 shows a very weak momentum compared to the same period in 2016 with TIV subtracted by 700 units. Despite lower sales in January to March in 2016, the market picked up steadily in April, May and June. In 2017, the trend was totally opposite with sales started to slow down after April.

There was an unplanned holiday declared in April 2017, resulting in working days for the month reduced to 18 days, 3 days shorter than the same period in 2016. The “dominos” of the one day “Cuti Peristiwa” to the market normally lasted for at least two or three months after.

In September 2017, another unplanned holiday was announced to celebrate our winning in the Sea Games that Malaysia hosted. The TIV dropped from 51,700 in August to 41,000 units in September. In 2016, the TIV for September was at 48,100 units. Similarly, although there was growth in October up to December 2017, but the momentum was very weak to match the growth and TIV recorded during the same period in 2016.

It is difficult to explain the exact relationship of the 1 day “Cuti Peristiwa” to the market, other than "it is a holiday". But, trend-wise, that 1 day added to  already a bit too many scheduled holiday did affects the overall performance of the market, unfavourably.

Perodua also suffered the same fate as a result of the unplanned holidays. Since Perodua is a volume player, the impact was even more severe compared to other OEMs. In April 2017, Perodua recorded a subtraction of 5,100 units at 14,400 units from 19,500 units recorded in March. In 2016, 14,900 units were registered in April, lower by just 2,700 from the month before. 


Similarly, though there was a growth post April but the momentum was weaker compared to the same period in 2016. Similar pattern also observed in September 2017 when Perodua only managed to register 14,400 units, a drop of 4,200 units compared to the previous month and 2,700 units lower than the same period in 2016. Worst, the recovery in the following months until year end was somewhat distorted. Typically, 4th quarter result contributes the highest percentage to Perodua annual performance at over 27 percent. In 2017, it only contributes around 26 percent.

For me, apolitical as I wish to be, I have to agree to YAB Tun Dr Mahathir’s recent critic on too many holidays declared "is not good". Or perhaps, in the future, the “cuti peristiwa” should be differed and implemented with sufficient notice and not as ad hoc as it was in the past.

Not a Jaguh Kampung We Are

Proton recently announced that it sold a total of 70,991 units in 2017, 1,300 units or 1.8 percent lower than what they registered in 2016. They attributed the decline to poor fleet sales due to lower taxi orders in 2017. On the retail side, sales improved by 2.5 percent to 68,184 units due to higher Persona sales, which recorded 27 percent growth over 2016’s performance. More than 30,000 units of Saga sold in 2017.

Meanwhile, Frost & Sullivan has also released their report on 2017’s performance and 2018’s forecast. On 2017, Frost & Sullivan assumed* that the TIV to be around 590,000 citing that higher demand for Passenger Vehicles were resulted from recovering economy and rising consumer confidence. On 2018, they forecasted that there will be a 2 percent growth in TIV with 601,000 units expected to registered this year, out of which, 540,000 units coming from Passenger Vehicle (PV). According to them, increasing in disposable income and strengthening ringgit would be the driver for the growth in 2018. They also cited that BNM continuous efforts to improve the quality of loans will dampen the growth to some degree.

* MAA has yet to announce the 2017 result.

Interestingly, somebody also shared these facts on Perodua.

1. Perodua is holding 40.1 percent market share of Malaysian Passenger Vehicle segment in 2017, grew by 1 percent from 2015.
2. Perodua is ranked number 4 in ASEAN market in terms of sales, trailing behind popular brands such as Toyota, Honda and Mitsubisi. 

For a mere 25 years local breed company, kudos to Perodua. We are not that "Jaguh Kampung" after all.

For me, we should continue to improve, yet stay humble.