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The automotive sector is one of those categorised as negatively affected by the sharp drop in the value of the Malaysian ringgit versus the US dollar. While emerging markets across the globe have been hit, the ringgit is Asia’s worst performing currency this year.

The greenback is the main currency that most auto companies – whether Japanese or European brands – trade in. Costs have increased for imported cars and components, but current car prices will be held for as long the car companies can take it, according to Tan Sri Asmat Kamaludin, group chairman of UMW Holdings.

“Unless its absolutely necessary, car companies will not increase prices,” said Asmat, who is also Perodua chairman. This is due to the local car industry being very competitive, he told reporters at the official opening of Perodua Sentral in Petaling Jaya today.

Perodua, despite having a high localisation rate of almost 90% (average across three models – Axia, Myvi, Alza), is also affected by the forex situation as the company imports in USD. “We have been impacted. To give you figures, it’s 2 to 3% of our bottom line (profit before tax) two to three months ago; now (at current rates) it’s 5%,” he revealed.

Minister of International Trade and Industry, Datuk Seri Mustapa Mohamed, who officiated the facility’s opening, said that MITI will engage with the automotive industry and will be meeting with the players to learn more about the issues affecting the sector.