Perodua Signs MoU With CIMB For End-To-End Supply Chain Financing Programme

Perodua vendors can now enjoy end-to-end Supply Chain financing programme which would increase their liquidity to meet the ever increasing demand in the auto industry.

The supply chain financing is divided into 2 parts – pre-delivery financing and post-delivery financing. Through the pre-delivery financing, Perodua vendors now will be able to obtain financing based on monthly order value to pay for raw materials.

Subsequently vendors will obtain the post delivery financing upon submission of invoices and documentations to Perodua for acceptance. Upon maturity of the invoices, Perodua then will pay to CIMB to settle the supply chain financing utilised by the vendors. Perodua and CIMB Group signed a Memorandum of Understanding to provide this facility to Perodua’s vendors.

En Aminar Rashid Salleh, Perodua Managing Director

“With such a financing programme, our vendors will have better cash flow for their operations, which will hopefully translate to higher productivity and quality of work,” En Aminar Rashid Salleh, Perodua Managing Director said during the signing ceremony.

Signing on behalf of Perodua is En Zainal Abidin Ahmad, Executive Director and Mr. KC Kok, Head of Regional Banking, CIMB Investment Bhd for CIMB Group.

Also present at the signing ceremony were Mr Osamu Oaki, Perodua Auto Corporation Sdn bhd Managing Director, YBhg Dato’ Charon Wardini, Deputy CEO, Corporate & Investment Banking, CIMB Group, En Badlisyah Abdul Ghani CEO of CIMB Islamic Bank and Pn. Noriani Soltan Talib, President of Kelab Vendor Perodua.

“This financing product is very dynamic and i would like to thanks and congratulate CIMB for being the first to introduce this type of financing in Malaysia,” Aminar said.

As of 2009, Perodua has a total of 141 vendors which the national car company has helped to develope technical training and technology transfers via Perodua’s Vendor Improvement (VID), Research and Development (R&D) and Procurement & Vendor Development Department.

Aminar said that Perodua is very committed to developing its vendor as the amount of local parts used in its products over the national car company’s 17-year history.

“When our first model – the Kancil – was rolled out in 1994, the local content was only 47%. In 2005, the local content was 80% for the MyVi from day 1! The VIVA was 85% when launched in 2007 and 90% for the ALZA in 2009,” he said.

He added that in terms of dollars and cents, Perodua has also increased its purchase of parts from its vendors from just over RM200 million in just 1995 to RM3.8 billion estimated for this year.

“We believe that the demand for parts will continue to rise as the demand for vehicles, especially passenger cars, continue to increase over the years,” Aminar said.

Earlier in the year, the Malaysian Automotive Association forecasted an annual increase of 3% for the total industry volume (TIV) until the year 2014 from a base of 537,000 units sold in 2009.

“Barring any unforeseen circumstances, we concur with this growth projection and this deal will help our vendors greatly in terms of liquidity for their operations to meet with the expected increase in demand,” Aminar said.