The first Kancil

Response to the new Perodua Viva must be very encouraging as Perodua has now confirmed that production of the Kancil, its oldest model, will stop sometime next year. Prior to the launch, at a media preview, it had been said that the Kelisa would be retired but the Kancil would stay in production for 'an indefinite period'. This put to rest the rumours that both models would be retired at the same time to be replaced by the Viva alone.

“We are now certain that we will stop Kancil production sometime in 2008 but exactly when will depend on the level of demand for the new Viva 660 over the next six months,” Hafiz Syed Abu Bakar, MD of Perodua told MTM while doing the rounds of the showrooms today. He added that for sure, the production would stop before the end of 2008.

It only makes sense to retire the Kancil which was Perodua’s first model as the Viva 600 can take its place easily. The only concern that Perodua has had is the price gap which still does matter to buyers in the lowest end of the market. A few thousand ringgit adds extra tens of ringgit to the monthly instalment and might even be equivalent to the total fuel cost per month.

Perodua sales, by model, during Q1 2007	Proton sales, by model, during Q1 2007

Retiring the Kancil will free up much-needed capacity for newer models and in 2008, there is to be another new model from Perodua. It is unknown if it will replace an existing model or be an addition to the range. It is evident that Daihatsu Motor, Perodua’s partner, is looking at an integrated production plan for the region which takes advantage of AFTA benefits and is spreading production between Malaysia and Indonesia. In this way, factories in both countries can have greater volumes for better economies of scale and lower production costs.

New Viva 660 will eventually be the cheapest Perodua model in the showrooms

Incidentally, all of the first batch of Vivas assembled before launch – some 2,000 units - seem to be taken already. Encik Hafiz revealed that since the launch on Thursday night, branches and dealers have received around 2,000 bookings for the Viva. But he said that they learnt from the lesson of the Myvi demand being very high and are more prepared this time, having allocated a higher production volume for the Viva so more units will be rolling out. Up to 8,000 units a month are planned for assembly.

While the Myvi is still a very popular model, Perodua wants to boost A-segment sales and also strengthen its position there. It will be interesting to watch since, unlike the time when the Kancil was original launched, it now has a few rivals. During the 1990s, the only rival it had was the Proton Tiara which failed to make any impression on buyers and even had to be withdrawn after a few years because sales were so bad. Today, however, there is the Naza Sutera and Suria as well as future threats like the Chery QQ and of course, the Savvy could also be regarded as a rival (since Proton originally positioned it against the Kelisa and not the Myvi).

In the first few years, the Kancil had no rivals. Proton tried with the Tiara (left) which no one wanted in 1996 and today, it is trying to capture the A-segment with the Savvy. Naza is also eyeing the segment and its contender is the Sutera

• Find out more about the new Viva in our article