This article first appeared in The Edge Financial Daily on May 23, 2018

KUALA LUMPUR: Perusahaan Otomobil Kedua Sdn Bhd (Perodua) hopes to continue learning from its Japanese technological partner Daihatsu Motor Co Ltd, amid a proposed takeover that could derail that long-standing relationship.

The national carmaker said it is “business as usual” as far as its research and development (R&D) activities are concerned.

“We have been in this marriage [with Daihatsu] for 25 years,” Perodua president and chief executive officer Datuk Dr Aminar Rashid told The Edge Financial Daily after Perodua’s iftar session yesterday.

“We have high hopes that we will continue to work closely,” he added.

Perodua’s 38% shareholder UMW Holdings Bhd, in March, proposed a series of acquisitions aimed at taking majority control of the carmaker.

The proposals mainly revolve around a RM501 million pursuit of a 22.58% stake held in Perodua by listed MBM Resources Bhd. UMW also seeks to buy another 10% stake held by its majority shareholder for RM417.5 million.

However, Daihatsu has opposed the move and responded by threatening to review its technological sharing with Perodua, according to a written letter to UMW sighted by The Edge Malaysia weekly.

Perodua shareholders have the right of first refusal if any shareholder wants to sell.

Daihatsu is a 30% shareholder in Perodua and cited the clause as a way it could block the proposed takeover.

When asked if Perodua is ready to develop its own cars without Daihatsu, Aminar said the company had learnt a lot throughout its 25-year partnership with Daihatsu.

“[It has] imparted a lot of knowledge and we have reached a certain level where we can do quite a lot ourselves as far as R&D is concerned. But there is still a lot more that we can learn,” he added.

Does that mean Perodua still needs Daihatsu? “Of course,” Aminar stressed.

Meanwhile, Perodua expects its temporary move to absorb the 6% goods and services tax (GST) to have an impact on the carmaker’s bottom line.

“Our bottom line will be affected, but that is okay. We respect the wish of the government of the day [to remove the GST]. Perodua will continue aligning itself with its stated objective of producing affordable cars equipped with high technology,” Aminar told reporters.

Last Friday, Perodua announced that it will fully reimburse the GST to customers who purchase a new Perodua vehicle, service their Perodua vehicle or buy parts between May 18 and 31, ahead of the zero-rated GST implementation on June 1.

Aminar is expecting increased car sales over one to two months as customers rush to take advantage of the attractive discounts offered by car companies before the sales and services tax (SST) kicks in.

Nevertheless, Perodua is keeping its sales target of 208,000 units for this year.

From January to April, Perodua recorded sales of 75,500 units, up 17% year-on-year, pushing its market share to 41.6% year-to-date.

“In April alone, our market share stood at 43%. This is the highest in the history of Perodua,” Aminar said.