Perodua to maintain prices of existing models in 2023

TheEdge Tue, Jan 31, 2023 03:32pm - 1 year View Original


KUALA LUMPUR (Jan 31): Perusahaan Otomobil Kedua Sdn Bhd (Perodua) will not increase the prices of its existing models in 2023, despite the rise in material prices.

Perodua president and chief executive officer Datuk Seri Zainal Abidin Ahmad said the company is resolving internal cost deductions to manage inflation. 

“We raised the prices of new models. However, it was not because of the inflation impact, but additional features in place, such as safety features,” he said on Tuesday (Jan 31) during Perodua’s 2023 outlook media conference. 

Based on Zainal’s personal forecast, he believes that the rise in material prices is at its peak in 2023, and will stabilise by mid-2023, due to economic recovery. 

He said that risk factors in 2023 include higher inflation, further increases in interest rates, and higher external cost factors, such as fuel, power, commodities and raw materials.

"These cost factors, if raised too steeply, will have a negative impact on the momentum that we are currently on. The increase may not only have the potential to depress the market, but also erase gains made by the industry, as it was just getting its second wind," Zainal said. 

He added that semiconductor chip supply is still a concern for manufacturers, but is positive that Perodua would have enough chips to meet its targets. 

Perodua earmarks RM1.15 billion capex for 2023

Zainal said that Perodua had allocated RM1.15 billion in capital expenditure (capex) for 2023 to improve its group operations, 35.2% higher than the RM850.5 million spent in 2022. 

He said that RM537.1 million in capex will be allocated towards the development of a new model. Meanwhile, another RM 247.1 million will be spent on modernising the company’s operations, which includes upgrading its showrooms and service centres.

Listed UMW Holdings Bhd has a 38% effective interest in Perodua, based on the group’s 2021 annual report. 

At the close on Tuesday, UMW was down 10 sen at RM3.70 a share, giving it a market capitalisation of RM4.32 billion.

Read also:
Perodua plans to absorb SST payment for spillover orders

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