KUALA LUMPUR: NAZA Automotive Group chief executive Rizal Jailan strongly believes the group is firmly entrenched on the growth path, as he sees huge potential in the niche vehicle market for Malaysia and his company this year.
In fact, he says that in this post-lockdown era, there are almost “no excuses” for the group to not expand its horizons, so much so that he is setting an ambitious RM1bil revenue target, which actually represents a 30% increase from what Naza Automotive has managed to achieve in 2022 – approximately RM700mil.
The group currently holds distributorship rights for four brands in Malaysia, namely Maserati, Mercedes Benz, Ducati and Suzuki.
“The opportunities to grow are always there. We are looking to bring in some new brands and we have developed aggressive plans to expand organically and otherwise.
“Of course, it goes without saying that we have to be mindful and tactful on what new models we would like to bring into the country,” Rizal explains to StarBizWeek.
Organic growth
Expounding further, the CEO says the first thing to do would be to lay out strategies to increase sales of the group’s existing brands, and one of these is by extending dealer networks, particularly for Ducati and Suzuki, to improve their customer reach.
On top of that, with Mercedes also rolling out its EQ models – the all-electric luxury sedan units – in Malaysia during the third quarter of 2022, Rizal says Naza Automotive is also looking to capitalise especially since the premium brand is also targeting more launches this year.
Furthermore, he says the group is by no means forgetting its reconditioned-car segment as he pledges to continue lending it commensurate support and focus, while reminding his colleagues with a chuckle, “Which is how Naza Group began 47 years ago!”
“With all these initiatives, I believe the RM1bil revenue goal is not far-fetched at all,” he says, before adding that Mercedes models are expected to continue being a major contributor to the turnover figure this year based on past records of volumes sold.
Turning his focus on Ducati, Rizal says Ducati Malaysia winning the award for Global Dealer of the Year in 2022 serves as a strong testament to the capability of the team in serving Malaysian customers and to promote the Ducati brand.
He observes: “In 2022, we launched five models at one go for the brand, which was rather aggressive. This year we are focused on product delivery, especially with the better supply situation globally at the moment.
“We anticipate sales to keep growing, so we are looking to increase the number of dealers to improve our customer reach for Ducati.”
Then, cracking a smile, Rizal acknowledges that Suzuki, one of the group’s other brands, can be seen as either a mass market label or a niche one.
However, he highlights that the Suzuki models Naza Automotive is bringing into the country are niche models, namely the Jimny and the Swift Sport, while also revealing that the group is not resting on its laurels but is also looking to get other models in the lifestyle segment under the Japanese brand.
The same strategy of increasing dealer network across the country also applies for Suzuki, says Rizal, especially with the intention to further improve post-sales customer service, as the group is focusing to expand further into the Klang Valley, Johor Baru and Penang.
“We already have a confirmed number of network branches to be opened, and we anticipate being able to roll out these initiatives by the middle of the year,” he says.
Inorganic growth
Arguably, the more interesting bits, however, appear to be in Rizal’s strategies for expanding Naza Automotive’s umbrella of brands, or what he calls “inorganic growth”, where the group is looking into branching into other brands.
A keen industry observer could make the case that this may also be a necessary step, especially as marquee brand Ferrari has terminated its distributorship deal in Malaysia with Naza Automotive.
Rizal is aiming to capitalise on the electric vehicle (EV) trend of the moment, saying that the group is already in talks with a number of potential partners, without revealing yet who these parties are.
However, he points out that Naza as a whole conglomerate is in a unique position to maximise on the EV opportunity on a much wider scope.
“We have other sister companies within the Naza Group that can complement us in EV projects.
“For example, Naza TTDI Sdn Bhd is a property and construction company within the Naza umbrella. So, for us as a group, we are not just focused on EVs as a product but also on the infrastructure such as charging stations to offer follow-up benefits to our potential customers,” Rizal explains.
Besides that, he says Naza Automotive is also in discussions with “an established EV infrastructure provider” in the country and would make an announcement regarding the cooperation soon.
On the other hand, Rizal reiterates his view that Naza Automotive is not “desperately” looking to replace the lost Ferrari distributorship rights, but instead affirms that the aforementioned strategies would be necessary anyway as the group takes a look at itself and where it plans to be in the next few years.
Looking to bring in one more niche automotive brand into the country on top of the EV brands the group is already in talks with, he is hopeful it would be able to make an announcement within this year or in early 2024 to confirm the new partnerships being forged.
Dealing with AP situation
Enhancing customer experience will also apply in how the group intends to deal with open approved permits (APs), moving forward, although this is not an entirely new issue since open APs have been implemented from Jan 1, 2019, the CEO remarks.
An open AP is an import permit facility given by the International Trade and Industry Ministry to qualified bumiputra companies to import reconditioned vehicles for sale in the domestic market.
Since dealing in reconditioned cars was what Naza was doing when it first opened its doors almost 48 years ago, Rizal believes automotive is deeply entrenched in the “DNA” of the conglomerate.
“There is no exclusivity now, so we have to keep asking ourselves why would customers persist in buying from us. Undoubtedly, over the years, Naza Automotive has established itself as a reputable reconditioned car selling company.
“One of the primary reasons why customers keep coming back to us is due to the quality of our products, because we pay personal visits to suppliers in order to secure the best cars at the most reasonable prices.
“We strive to ensure the buying experience is a pleasant one for our customers until the handover of the vehicle and of course now beyond with our post-sales service,” he adds.
General prospects
Viewing into the future with the group he helms from multiple angles, Rizal says one of the concerns Naza Automotive will always need to be aware of is the foreign exchange rate, especially in how the ringgit compares to the US dollar, the currency in which it trades most often.
Recognising that this will always be an uncertainty that would need meticulous attention, he says the group’s profit margins have been significantly impacted by the strong dollar last year due to the giant Federal Reserve hikes.
“This year we are better prepared, especially with our cost management, so hopefully we are going to have better results.
“On top of that, I think we are seeing light at the end of the tunnel as far as macroeconomic factors are concerned, as supply and logistic costs are also coming down to ‘normal’ levels,” he says.
He believes prospects are also buoyed by production capacities of the group’s principals returning to pre-lockdown volumes.
Furthermore, while the well-documented consensus view of the market this year is one of a slowdown from the bumper year of 2022, especially in terms of consumer spending, Rizal is confident that Naza Automotive would not be adversely affected.
“There are a few reasons for our optimism. First of all, we believe that the tech-savviness of the younger generation would mean there will be a market for EVs over the mid to longer term.
“Secondly, we maintain that the ball is in our court in terms of what cars we want to bring in, in order to serve the respective market segments, which then gives our customers options to purchase vehicles according to their budget levels.
“Aside from those factors, we are not forgetting the fact that we are already in the niche segment. We believe customers in this group are those whose purchasing power is less likely to be affected by macroeconomic factors, plus they have different expectations in terms of customer experience,” he details.
For example, he says, Naza Automotive is investing to upgrade its Maserati showroom, the only one in the country so far, to the latest Gen 3 Corporate Image status, targeted to be completed by the third quarter of the year, to improve customer satisfaction and experience.
One final focus point for the group, Rizal emphasises, is in staying relevant and keeping up with the latest technology in the automotive sector, which primarily involves maintaining a good relationship with all its principals to be updated on their product offerings.
“This is so we can form our thoughts about suitable products to be brought into the country because no one knows the Malaysian market other than we do ourselves as Malaysians.
“More importantly, this would enable us to prepare our infrastructure here in relation to the products we bring in,” he says.
Of interest, while admitting he has not been given details of how performance brands such as Maserati and Ducati intend to branch into the EV market, Rizal believes they will do so.
However, he notes: “Although we are unclear now how they will do it, these brands will not stray far from their DNA. They are performance driven, and will always remain so, regardless of how they intend to weave the EV agenda into their products.” – By KEITH HIEW, [email protected]
Keyword: Naza Automotive keeps up bullish outlook; sets RM1bil revenue target