Peugeot to offer 5+5-year warranty, quick service with Berjaya; Bermaz to add Kia franchise by year-end?

Having taken over the Peugeot distributorship from Naza, Berjaya Auto Alliance (BAASB) is looking to hit the ground running. The joint venture between Berjaya and Bermaz is expected to introduce an attractive warranty package to combat the poor public perception of aftersales service, according to The Star.

Citing a report by Maybank Investment Bank, the publication stated that the company would offer a “5+5 year warranty” on new Peugeot vehicles. This presumably consists of a five-year factory warranty and either an additional five-year powertrain warranty or a five-year extended warranty underwritten by an insurer, resulting in 10 years of total coverage.

Also promised is a quick service turnaround, with the hope of banishing memories of past parts unavailability. With these measures in place, BAASB is targeting annual sales of 4,000 vehicles, up from just 947 units in the first 10 months of 2020. The positive outlook is likely buoyed by the new 2008 crossover, which is due to arrive next year in CKD locally-assembled form.

Despite Berjaya owning a 51% stake in BAASB as opposed to Bermaz’s 20% share, it’s understood that the latter will take the lead in operations, with the company riding on the strength of Berjaya’s balance sheet and internal networks (such as the Starbucks franchise).

The report said that BAASB is confident in turning around the operation within 24 months. As such, with minimal capital expenditure, Maybank Investment Bank is expecting the company to turn a profit in its second year of operations, with an annual net profit of between RM8 million and RM10 million.

The partnership could expand beyond the Peugeot brand should the business become successful, the report also stated. Groupe PSA, which owns Peugeot, has a variety of brands (including Citroën and DS, for which BAASB will also provide aftersales service) and a host of electric and hybrid models. This is particularly beneficial for Bermaz as its other brand, Mazda, lacks the electrified vehicles it needs to compete.

Bermaz is also “keen” on acquiring another automotive brand by the end of the year, which is widely touted to be Kia. Unlike Peugeot, the third franchise will be majority-owned by Bermaz.

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