Perodua has announced today that it will be developing a new regional sedan for the Toyota Motor group to sell in South East Asia.

Recall that back in 2016, both Toyota and Daihatsu formed a new internal company called Emerging-market Compact Car Company (EMCC).

In elaborating the role of the new internal company, Toyota said:

• The Emerging-market Compact Car Product & Business Planning Division, which is to span both Toyota and Daihatsu, is to conduct overall planning for products and business operations, including making proposals for the Toyota-brand vehicle product line-up for emerging markets and for overall strategy.
• Although Daihatsu will basically have responsibility for product development for emerging-market compact cars, the new internal company's Emerging-market Compact Car Product Planning Division and Emerging-market Compact Car Quality Planning Division will be responsible for final product development and quality for Toyota-brand vehicles.

At Perodua’s 2019 business review press conference earlier today, Perodua President and CEO Dato’ Zainal Abidin Ahmad gave us a brief overview of the longer term direction for Perodua’s R&D activities.

Part of the presentation outlined Perodua’s long-term goal of becoming a self-reliant R&D hub for the ASEAN region, developing products not just for Perodua, but also for the rest of the ASEAN region, including models that won’t be sold in Malaysia (if it's not suitable for our local needs) – basically what EMCC is supposed to do.

Many criticise Perodua for being a maker of rebadged Daihatsu cars, one that adds little or no value to the country’s technical know-how. The truth is actually the reverse.

Why Perodua?

Far from being a mere maker of rebadged Daihatsu cars, Perodua is actually doing a lot of development for Daihatsu. Why? Because Daihatsu’s biggest overseas market is in Indonesia, where the Daihatsu Xenia (Toyota Avanza) and Daihatsu Terios (Toyota Rush/Perodua Aruz) dominate.

However Indonesia doesn’t have the R&D capability that Malaysia has and between the Japanese and Malaysians, who do you think understands the needs of Indonesian buyers the most?

Over the last 10 years, Daihatsu have been grooming Perodua to become a self-reliant, R&D Hub for Daihatsu’s products for the ASEAN region.

Since 2015, Perodua have received many consignment work to develop products for Daihatsu’s export markets (mostly Indonesia).

Daihatsu pays Perodua for these work in US Dollars but more important than diversifying Perodua’s revenue stream, these work are baby steps for Perodua to eventually become an R&D hub for the region, one that will take the lead in development of regional products.

Recall that Perodua already makes the 1.5-litre Dual VVT-i used in the current Toyota Vios. The engine is shared with the Perodua Myvi, as well as the Aruz.

Despite using different engine codes, 2NR-FE for Toyota and 2NR-VE for Perodua, the two aluminum block engines are nearly identical, save for some slight differences in tuning. The difference in engine codes is just to differentiate which engine goes into which make of car.

Both the 2NR-FE and 2NR-VE engine are manufactured at the Daihatsu Perodua Engine Manufacturing plant in Sendayan Techvalley in Negeri Sembilan.

Back to the upcoming Toyota/Daihatsu sedan. Although the presentation slide showed four silhouettes of unknown cars of various body types, CEO Dato’ Zainal Abidin Ahmad cautioned us against reading too much into it, but he did confirmed that one of it is a sedan, and hinted that it is a major project.

It could refer to the next generation Perodua Bezza but the Bezza is an A-segment sedan and this class of vehicle rarely exist outside of Malaysia so there’s little potential for it to be a regional product. For most other countries, an A-segment car has to be a hatchback.

A B-segment sedan like a Toyota Vios is more likely, as this segment is huge in Indonesia, Thailand and Philippines.

In Indonesia, all core Daihatsu models are also sold as a Toyota. This is true for the Xenia (Avanza) and Terios (Rush). It’s only logical that Daihatsu extends its offering to a compact sedan. Whether it’s an A- or B-segment model is still up for speculation.

As expected, Perodua is keeping its cards close to its chest but what’s confirmed is that the sedan will be developed using Daihatsu latest DNGA platform, which is basically Toyota’s much vaunted TNGA platform but under a Daihatsu badge.

All future DNGA-equipped cars will be developed to include support for Internet connectivity, semi-autonomous driving, hybrid drivertrain. Whether will the model actually be launched with such features or not is dependent on market demand and how much consumers are willing to pay for it.

Back in 2017, Daihatsu exhibited the DN-F sedan at the 2017 GAIKINDO Auto Show in Jakarta. It has a 4.2 metre length, which is the length of a Bezza.

Whichever the case, we look forward to a budget hybrid that brakes itself, steers itself, drives itself, connects to Internet, handles well. The future is looking very bright for Perodua.