Inflation is happening in most places across the globe now, due to various reasons, and Malaysia isn’t spared, even if the rate is relatively subdued here. But late last year, talk about prices of car spare parts shooting up surfaced, and hefty figures of up to 60% was quoted.

At Perodua’s 2022 outlook media conference today, Perodua president and CEO Datuk Zainal Abidin Ahmad acknowledged that raw material costs have indeed increased by a fair bit last year, and the situation has not abated.

“The challenge for this year is the increase in raw material price. The price of steel is forecasted to increase by more than 20%. In the third and fourth quarter last year we saw an increase of beyond 20%, and for the first quarter this year, we also expect an additional 10% increase on top of what we saw last year,” he revealed.

Despite this, the Malaysian auto market leader does not plan to pass on the higher raw material costs to customers. “However, for Perodua we do not intend to transfer this increase to the customer. As of now, based on our current plan, our current benchmarking and competitiveness study, we should be able to absorb any (material price) increase, as of now,” Zainal declared.

As if that’s not good enough, we should brace ourselves for a surprise – lower spare parts prices. The P2 chief revealed that the carmaker is working hard to maintain or even reduce the price of parts. You read that right: a reduction, which is a surprise in a world where prices are sticky-down.

“Other people are talking bout spare parts price increase. For this year, it’s good if we can retain or reduce our spare parts prices. This is where we should give the opportunity for Malaysians to service their cars after two years of lockdown. We hope that the Malaysian customer will go back to the authorised service centres.

“We are now studying if we can – it’s a tough and difficult challenge – but we’ll announce later if we can give more competitive spare parts pricing to our customers,” Zainal said.

As for car prices, Malaysian car buyers are still enjoying sales tax exemption, which will be in place till June 30, 2022. Perodua models are between 3% to 6% cheaper due to the 100% SST exemption for locally assembled cars. Asked on the possibility of another extension by the government beyond the mid-year deadline (it started in June 2020 and has been extended three times since), Zainal called it a 50-50 situation. An extension would benefit the company and its customers as Perodua has a high number of outstanding bookings.