Impact of tsunami not as bad as anticipated, says Perodua

KUALA LUMPUR: Perusahaan Otomobil Kedua Sdn Bhd (Perodua) expects production to “fully recover” by July following the shortage of components and spare parts due to the earthquake that hit Japan in March.

Managing director Datuk Aminar Rashid Salleh said disruptions to its vendors' operations were minimal and that it was sourcing parts for the affected components elsewhere as counter-measures where necessary.

“With the help of our partner, Daihatsu Motor Co, we were able to recover faster,” he said at a briefing on the impact of the Japan supply chain disruption yesterday.

He said the company's inventories were “slightly affected” in May, with overall production between March and June expected to slip by an average of 11%.

“By July, we expect to fully recover and we will try to recover whatever shortfall we had in terms of production and sales,” he said, adding that a total of 23 engine components and accessories involving the Myvi, Viva and Alza models were affected by the Japanese disaster.

In early April, the company said in a statement that it was impacted by the earthquake and tsunami and that the inventories at Perodua's plant and its vendors were sufficient until May.

“The impact was not as bad as anticipated,” Aminar said yesterday, adding that immediately after the earthquake, the area where its Japanese vendors were located was closed down and access to the site prohibited.

“Many original equipment manufacturers had to shut down. Owners of factories were not allowed to go into the area and disclose information (to us) immediately.”

Aminar said one of the reasons for the early recovery was Perodua's high local content, with some vendors resorting to alternate sources for the parts.

He said about 12% of Perodua's total vendors (both local and foreign) were affected by the Japanese earthquake.

Despite the disruption in production, he is still confident of Perodua hitting its sales target of 195,000 units this year. Aminar said the company expected good response for its next model, to be launched sometime between May and August, as well as its existing models.

“We still have seven to eight months left (to achieve the sales target),” he said.

Aminar declined to disclose any details about the new model, which has been rumoured to be based on the Myvi platform. The Myvi is Perodua's best-selling model currently.

In the first quarter, Perodua sold 45,700 units. Aminar said the company sold about 13,800 units in April.

Perodua's shareholders are UMW Corp Sdn Bhd (38%), MBM Resources Bhd (20%), Daihatsu Motor Co Ltd (20%), PNB Equity Resource Corp Sdn Bhd (10%), Daihatsu (Malaysia) Sdn Bhd 5%, Mitsui & Co Ltd 4.2% and Mitsui & Co (Asia Pacific) Pte Ltd 2.8%.

On another note, Aminar said emphatically that Perodua would not benefit from a merger with Proton Holdings Bhd.

“We were given the opportunity to make our stand (on the merger) to the Economic Council. We reiterated our stand and we don't see the benefit,” he said.

Aminar, however, said that Perodua was keen to look into new areas where it could collaborate with Proton.

As it stands now, Perodua, which is partly owned by Japan's Daihatsu Motor Corp, makes the cylinder heads for Proton's Campro engines and further cooperation and joint ventures in parts and components are being considered.

In a recent news report, Proton group managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir was quoted as saying that Proton had met with the management of Perodua and had identified core areas which could be improved.

“They are vendor development, procurement and quality improvement,” he was quoted as saying.

Said Aminar: “We can enhance further the strategic collaboration (between Proton and Perodua) and we are looking at new areas where we can collaborate.”