• Madani Sahari

Perodua's successs paves the way for other local firms

The Perodua brand has been part and parcel of the lives of many Malaysians.

It has filled Malaysia’s need for simple and effective transportation, with 2.7 million cars produced to date, mostly within the small car market.

From the Kancil to its latest addition the Axia, those seeking for a reliable, affordable and

practical option to travel have made Perodua their brand choice.

Perodua has maintained its position as Malaysia’s largest market shareholder, consistently holding between 29 to 33 percent between 2006 to last year.

It reported a 36 per cent market share in the first quarter of this year despite a market slowdown.

The company maintains an equity distribution between Malaysian and Japanese shareholders as an important factor to this success.

At the holding group level, Malaysian shareholders hold the majority equity. Within the group, Japanese majority is maintained within its manufacturing companies.

This distribution of equity creates a synergy of cooperation in the areas of technology development, process efficiency and human capital development within the Perodua ecosystem, from its new energy efficient plant, Perodua Global Manufacturing, to the lower tiers within its supply chain.

Since its establishment in 1993, Perodua took an incremental, yet continuous growth in its capabilities and products lines.

It undertook massive efforts in strengthening its supply chain, which comprise both local and multinational companies.

Great value was provided to the local ecosystem through a strong localisation drive – 95per cent of the Axias comprise parts produced locally.

To enhance the supply chain, Perodua led their vendors by example through Perodua’s Transformation Exercise, incepted in 2011.

They worked on changing mindsets and working cultures and their vendors were required to work towards leaner and more cost effective production practices.

Perodua also worked closely with their employees on basic productivity. For example, they instituted marching as methods to develop a culture of discipline, and developed 2S committees, responsible to ensure working areas are tidy and self-maintained, resulting in increased productivity among employees.

The after sales service was also a priority for the company. Perodua ensured that their service centres met customer expectations, and this was represented through their flagship 4S headquarters, called Perodua Sentral, located in Petaling Jaya.

Perodua is taking the next step – developing their own models. This new model, currently titled D36D, again will be a product of collaboration with Perodua’s counterparts, using shared platform technologies, but with an entirely new upper body design built by local engineers.

It also has several new energy efficient engines in the pipeline, which will be produced in its engine plant in Sendayan.

Liberalisation of the Malaysian automotive sector is a gradual, but inevitable process.

The recently signed Trans-Pacific Partnership Agreement, and the ASEAN Economic

Community, will open up opportunities to a population of more than a billion people.

Malaysia needs to strive towards competitiveness, and this can no longer be done through commodity and cheap labour, but through the value added activities of high end manufacturing and services.

Perodua is a great example of how local companies can develop itself towards global success.

Through the National Automotive Policy 2014, it is hoped that the country can see more original equipment manufacturings and vendors taking the same bold steps, towards enhancing the competitiveness of the automotive industry.

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