Brake on spending

Business Times

By Zuraimi Abdullah

It will be a year of spending cuts for automotive companies in 2009 amid a grim industry outlook, said the chief of the country's largest car company by sales.

Perusahaan Otomobil Kedua Sdn Bhd managing director Datuk Syed Abdul Hafiz Syed Abu Bakar said industry players would spend less and delay new launches because of the depressed market.

"Even Toyota has said it will stop spending on large investments. There will be a delay in new launches," he said after the launch of Perodua's free rear seat belts installation exercise in Kuala Lumpur yesterday.

Hafiz, nevertheless, said the planned launch of Perodua MPV (multi-purpose vehicle) remains on track.

"As far as we are concerned, our MPV is still on track for launch in the fourth quarter of 2009," he said.

The new MPV from Perodua, which controls 31 per cent of the country's sales of new vehicles, is widely anticipated after Proton Holdings Bhd's own MPV slated by March next year.

Given the expected shrinking overall car sales in 2009, Hafiz expects a modest sales target of less than 3,000 units of Perodua MPV a month.

Meanwhile, Perodua is spending about RM60 million to install seat belts for rear passengers in its cars.

Hafiz said the high cost is inevitable as it involves 435,000 units of Perodua cars like the Kancil, Kelisa, Kenari, Kembara and Rusa. More recent models like the Myvi, Viva and Nautica are already fitted with the belts.

"More than half of the RM60 million is the cost of hardware, which is the right, left and central rear belts. Installation and labour make up the rest of the cost," he explained.

The exercise is a reply to the new rule requiring cars to have seat belts for all back passengers from January 1 next year.

Additionally, there are some 110,000 units of the Kancil manufactured without anchorage points, and they are exempted from the rear seat belt regulation.

Perodua owners are urged to call any of the company's 43 appointed service branches nationwide for an appointment.