Perodua Invests RM7 Million into IQM Sdn Bhd to Centralise Their Old Model Body Parts Manufacturing

This piece of news happened a couple of weeks ago but it is interesting in terms of investments made in the Malaysian automotive industry. Our folks at Perodua has basically  centralised their parts production for its past models with the launch of a new press stamping machine (seen in the photo above) at its supplier's facility, IQM Sdn Bhd. The RM7 Million investment is unique in that it shows that Perodua is still catering to their older customers by providing a constant supply of spare parts for their past generation vehicles aside from expanding their supplier's capabilities so that they may eventually compete on a global level.

The new RM7 million investment over at IQM's premises in Tanjung Malim includes the metal press stamping machine as well as its transportation and installation which was all done by Perodua themselves. The humongous 1,600-metric tonne hydraulic press stamping machine will produce body parts such as bonnets, side outer panels, rear quarter panels, fenders, doors and roofs for older Perodua models like the first-generation Myvi, Viva, Kelisa and even the Kancil.

Stamping of these panels require dies to cast the panels in. So the stamping dies required to make these parts have also been moved to IQM. What all of this does is free up a lot of space within Perodua's facilities itself. The extra space simplifies the entire operation, reduces lead time and cost, and makes it easier to monitor under one roof. IQM also receives skill transfer and training where past model parts production is concerned making another local vendor have an expanded skill set for the future.

That said, IQM has been a Perodua supplier since 2002. It currently supplies metal stamping, body assembly parts and brake tube components to Perodua. It began making Viva parts when production of the model ended in 2014, and last year it began making parts for the second-generation Myvi on a dedicated new line. So they are not first time spring chickens in terms of body parts. Maybe there will be a learning curve for the older models, but IQM looks like a very capable supplier from the outset.

Perodua President and Chief Executive Officer Dato’ Zainal Abidin Ahmad said that Perodua’s decision to centralise past model parts production at IQM is four-pronged. Firstly, the company wants to continue supporting owners of their past models with quality, quick and affordable parts through our Body & Paint business, because as long as you own a Perodua vehicle, old or new, the company will always be there for you.

Secondly, Perodua is committed to empowering all 135 of our Malaysian suppliers, not just by buying from them but helping to develop them via skill and technology transfers. 

Thirdly, it represents Perodua's commitment to the nation and its economy by helping to boost the competitiveness of the Malaysian automotive eco-system.

And Lastly, this investment represents a commitment to themselves. An improvement to quality and efficiency so that Perodua can be a better and leaner company moving forward.

The push for a local supplier to keep on producing body parts makes sense as stated above. It clears up a lot for Perodua to continue developing and making new cars while letting a supplier take the brunt of producing after sales spares. Perodua has sold over 3.7 million cars in Malaysia since 1994 and currently, a third of the demand for Perodua parts is for their past models.

With all its current models having over 90% local parts content, Perodua is naturally the biggest buyer of automotive components in the country, having spent RM4.5 billion on parts so far this year out of an earmarked RM5.4 billion for the whole of 2019.

From what we see, it does show that Perodua ensures long term ownership for their cars. They are willing to invest in their local vendors in terms of equipment, training and also guiding them when necessary. What this does is ensure more productivity in the long run and it also ensures some technical knowledge to be imparted to our people in the long run. 

 Perodua President and CEO Dato' Zainal Abidin Ahmad (10th left), Perodua Vice-Chairman Datuk Shigeharu Toda (6th left), Perodua Auto Corporation Sdn Bhd President Mr Masanori Takahashi (8th left) and Vice-President Datuk Ahmad Suhaimi Hashim (14th left), and IQM Sdn Bhd Managing Director En Mohd Fitri Md Aris (12th left) pose with the Perodua and IQM teams involved in the project in front of the new 1,600-metric tonne hydraulic press stamping machine