Perodua may increase car prices following decline of the ringgit

Perusahaan Otomobil Kedua Sdn Bhd (Perodua) is considering to increase the price of its vehicles following the decline in ringgit value.

Perodua president and CEO, Datuk Aminar Rashid Salleh said the consideration was made as the company recorded a decline in profit before tax as much as five percent.

"The decline in ringgit value impacts the company's operation cost in the long term. We tried to maintain the price of all Perodua models, but the continuous (ringgit) decline is causing us to re-evaluate the price," he told reporters after the launch of Perodua Sentral here today.

The event was officiated by International Trade and Industry Minister Datuk Seri Mustapa Mohamed.

Aminar Rashid said almost 90 percent of Perodua components are fixed locally, however there were certain components which are imported using US dollars, which is costly for the company.

Meanwhile, Mustapa said the ministry together with Malaysia Automotive Institute (MAI) will continue working with industry players to look into the effects of the decline in ringgit and the help which can be channelled.

"It is still too early to inform what can be done. We are still looking into its effects. The weak ringgit is affecting the industry as a whole," said Mustapa.

He also commented on the action taken by NAZA Automotive Manufacturing (NAM) where over 300 workers were retrenched recently.

"Most of these workers have been absorbed by other automotive industry players. This is not something to be concerned about if compared to 1998 (financial crisis)."

Meanwhile, he said the Total Industry Volume (TIV) 2015 is expected to be stable despite a decline of 3.2 percent in the first seven months of this year.

"The actual expected TIV is higher than last year," he said.

Also of the same opinion is MAI CEO, Madani Sahari who said sales will increase as the year comes to an end.

"Manufacturers will begin promoting its products on a huge scale by the end of the year and I encourage the public to purchase cars."

TIV 2015 is targeted at 680 million before it was reduced to 670 thousand post GST (Goods and Services Tax) implementation.