Huge demand for the Avanza

  • Business
  • Saturday, 30 Oct 2004

UMW Toyota Motor Sdn Bhd has received close to 30,000 bookings for its entry-level multi-purpose vehicle (MPV), the Avanza, and is now contemplating an increase in production to meet the staggering demand. 

“The waiting period can be shortened if we can raise production to 4,000 units per month,'' said UMW Toyota managing director David Chen. 

The response from Malaysians wishing to buy the MPV has exceeded the expectations of the company, which had earlier anticipated selling 2,000 units a month. 

Chen said UMW Toyota would now have to work with its partner, Perusahaan Otomobil Kedua Sdn Bhd (Perodua) which assembles the Avanza, to find a way to boost production volume in order to satisfy the demand. 

A photo illustration of David Chen and an Avanza.

That, however, might not be easy to accomplish. 

It will be difficult to increase production at the plant of Perodua, which has spent RM29mil to upgrade its assembly line for the Avanza, as the model is equally hot in Indonesia, where the completely-knocked-down components are sourced from, and Thailand. 

News reports say that 32,000 units of the Avanza have been sold in Indonesia since it was launched there in January, with 15,000 more on order. In Thailand, the number sold since the model's launch in July is 2,800 units, with 5,500 more on order. 

The success of the Avanza is expected to benefit both UMW Holdings Bhd and Perodua. Analysts say that while initially margins are not expected to be great, UMW Holdings will make up for that with “a big dose of volume.” 

Chen said the Avanza bookings had not cannibalised sales of other Toyota vehicles. That means UMW Holdings will have an increase in not just the number of units sold but also its share of the motor vehicle market. 

The strong response to the Avanza will certainly be a windfall for UMW Holdings, as it has already sold around 34,000 Toyota passenger cars, commercial vehicles and 4WD vehicles in the first nine months this year. 

In the passenger car segment alone, bookings for the Avanza have handsomely exceeded the number of Toyota passenger vehicles sold in the January-September period this year of 20,300. 

In the year-to-date, total industry volume of motor vehicles sold in Malaysia stands at 355,815 units. 

The success of the Avanza has caught other car companies flat-footed, as they had not expected such strong demand for an MPV in a country where sales have traditionally been dominated by sedans. 

The Avanza was originally launched at RM55,967 for the five-speed manual and RM59,989.88 for the four-speed automatic version, but prices have since been increased to RM58,400 and RM62,500 respectively. 

”The price increase is to cover uncertainties in the future as raw material prices are increasing everyday. Rather than sign at a price we can't meet, we prefer to be upfront with our customers,'' Chen said. 

He added that the price increase applied to new bookings only; UMW Toyota will honour orders placed earlier at the old prices. Still, those who have made bookings at the old prices but have yet to receive their Avanzas may have to pay more if the government duty structure for non-national cars is revised upwards from Jan 1 next year. 

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