This article first appeared in The Edge Financial Daily on August 3, 2018

KUALA LUMPUR: Perusahaan Otomobil Kedua Sdn Bhd (Perodua), the country’s top car seller, expects a challenging second half of this year (2H18), despite recording “phenomenal” record sales and aftersales results in 1H18.

“Our sales peaked in May at almost 22,000 units. However, we do not foresee this momentum continuing in the subsequent quarters of the year,” Perodua president and chief executive officer Datuk Aminar Rashid Salleh said in a statement yesterday.

Nevertheless, Perodua said it is maintaining its target to sell 209,000 cars this year, 2% more from the 204,887 units it sold last year. It is also keeping its target to produce over 215,300 cars this year, 7.5% more than the 200,100 cars it produced last year.

Aminar said Perodua is still unclear about the full mechanism of the new sales and service tax, despite the group’s ongoing engagement with the government.

“On the assumption that there will be an increase in vehicle prices from September, we foresee the public going through a period of adjustment, hence resulting in less demand for a certain duration,” Aminar said.

“Perhaps the impact would be up until December 2018 when typically most players would give good offers to reduce their carry-over stock into the following year,” he said.

Between January and June this year, Perodua posted record half-year sales of 117,100 cars, which were 17.5% higher than the 99,700 units it sold in the same period last year. Consequently, its market share grew to 40.4% as at end-June.

Perodua said the strong sales were driven by its four bestselling models: Myvi, Axia, Bezza and Alza. Myvi topped its sales chart with 46,860 cars, followed by Axia (33,870), Bezza (23,555) and Alza (12,815).

“We attribute this sales record to continued strong demand for the new Myvi, as well as for our other models in the first quarter, while towards the end of the second quarter, we saw a surge in sales due to the zero-rated goods and services tax,” Aminar said.

Because of the sales surge, Perodua also upped its vehicle production to 109,000 units between January and June, 10% higher than the 99,000 units it produced in the same period last year, Aminar added.