BAUTO EXPECTS CX-5 TO DRIVE SALES
Distributor of Mazda vehicles to leverage Asean Free Trade Area in export push
BERMAZ Auto Bhd (BAuto), the distributor of Mazda vehicles in Malaysia, is upbeat on prospects amid optimism of increase in deliveries to regional markets.
Kenanga Research expects BAuto’s sales to gain traction with its flagship model, the allnew Mazda CX-5 sport utility vehicle (SUV), along with commencement of SUV exports to Thailand, Indonesia, the Philippines and Cambodia.
BAuto chief executive officer Datuk Seri Ben Yeoh said it had so far this year secured backlog orders of 6,000 units of Mazda vehicles from the local market.
Yeoh said BAuto was estimated to produce 100,000 units of the CX-5 in 2½ years via its 29 per cent-owned associate Inokom Corp Sdn Bhd.
About 58,000 units of the SUV have been produced since 2013.
“It will be viable for the local components suppliers to localise and effectively amortise their investments for bigger volume, which will make them competitive,” he said after its annual general meeting, here, yesterday.
Yeoh added that the distributor of Mazda vehicles was capitalising on the Asean Free Trade Area, which liberalised trade in the region through elimination of both intra-regional tariffs and non-tariff barriers.
“We produce substantially quality cars locally. It’s not only for local consumption, but for the regional markets (Thailand and the Philippines),” he said, adding that the CX-5 was a critical model for BAuto.
Yeoh said Inokom’s plant in Kulim, Kedah, was now assembling 2,000 units a month with equal consumption for both domestic and exports markets.
“We have utilised about 50 per cent of the plant’s installed capacity. The domestic supply will be increased slightly at the expense of exports, with shipments to Thailand and the Philippines to be slightly delayed.”
He said BAuto was hopeful of exporting the CX-5 by next month or December.
Meanwhile, the supply of Mazda’s complete built-up (CBU) units was slightly hampered by the flood and typhoon in Japan recently.
On the absorption of the Sales and Services Tax, Yeoh said the exercise would lower BAuto’s margin, but the company had cut its advertisement and promotion expenses to mitigate the impact.
“We have agreed with our dealers that there would be less effort now to promote the vehicles because they have already secured orders. There will be reduction in dealer incentives and they should be able to retain their full dealer margins without discounting.”
Yeoh said BAuto was fortunate to be only exposed to the yen in its business transaction, adding that the company had hedged some orders to buffer against foreign exchange volatility.
“The appreciation of yen is not as fast as the US dollar. We are in quite comfortable position,” he said, adding that the company obtained CBU models from Mazda Malaysia Sdn Bhd with payments in ringgit.
Yeah said BAuto expected to introduce more new models, including the Mazda 6, improved CX-5 and the CX-3, to boost sales, while a brand new Mazda 3 was set to be introduced locally in 2020.