According to The Star, the Naza-Berjaya consortium has apparently been chosen by the government as the new service provider that will supply, maintain and manage its fleet of official cars and police patrol vehicles. It is believed that the consortium has received the letter of intent from the finance ministry, with the actual award set to be announced by June.

The consortium is set to replace the current fleet management provider, Spanco, which has had the contract since 1994. Spanco is an independent fleet management company with two flagship service centres in Batu Caves and Bangi, and over 200 services centres across the country.

The need to appoint a new company comes after the 25-year government concession with Spanco came to an end in December 2018 – the company was then given an two extensions of six months each in 2019 to continue managing the fleet until the end of last year. The news report adds that it is believed that Spanco has been given another six-month extension to June, pending the award to the new concessionaire.

In February last year, the government called for proposals for the contract to supply, maintain and manage its fleet of official cars for the next 15 years. Proposals were reportedly received from at least seven companies for the new concession – aside from the Naza Group, other bidders include Berjaya Group, Sime Darby, DRB-Hicom, Samling Group, Comos and Go Auto as well as incumbent Spanco, which was aiming to retain its concession.

While the size of the concession has yet to be revealed, it is estimated that based on the current fleet of 12,500 vehicles, the contract could be worth RM300 million a year from the fifth year onwards. The existing fleet, all leased from Spanco through a five-year replacement cycle arrangement, includes vehicles used by ministers and top civil servants, as well as police patrol vehicles.

Under the contract with Spanco, the end-to-end fleet management concession came with a five-year replacement cycle designed to ensure the government’s fleet stayed current, with the maintenance cost of each of these vehicles capped at pre-determined limits.

A source told the publication that the new concession holder will only start supplying new cars to the government to replace out-of-lease Spanco vehicles once they have finalised the award. However, even if a new concessionaire is appointed, Spanco will still be contracted to maintain and manage the cars leased by it and which are still in service until those are eventually replaced.

Apparently, Spanco supplied around 2,000 cars to the government over the past 12 months as replacements for vehicles that have reached their maximum five-year limit, and this includes around 500 Proton X70s delivered between December and January this year – the SUVs are now in use as official cars for the public sector’s super scale (Jusa) officers. Ministers, meanwhile, are apparently sticking with Protons.

Government cars have traditionally been CKD cars (apart from the CBU X70s), so it’s likely this will involve new vehicles and not Naza’s grey import fleet. Usually, Jusa vehicles have been D-segment sedans, but have recently included C-segment SUVs – with the new contract, future CKD models could include the Kia Optima, the only CKD D-segment sedan in Naza-Berjaya range, as well as the Mazda CX-5.

The Kia Cerato could also be an eventual replacement for the current Preve. Elsewhere, while Naza holds the distributorship of a few brands, it also has dealers selling a lot of other brands too, including Mercedes-Benz, through NZ Wheels.

The Naza-Berjaya consortium has 20 brands of vehicles under its stable, including Kia, Peugeot and Mazda. In August last year, Naza Corp chief strategy officer Azrul Reza Aziz told the publication’s StarBiz that the Naza-Berjaya consortium would be able to extend competitive vehicle rental rates and help the government achieve cost efficiency through end-to-end offerings, thereby benefiting the government in terms of lower and manageable costs.