KUALA LUMPUR: Spanco Sdn Bhd has been appointed by the government to supply a total of 40 units of the Toyota Vellfire, according to industry sources.
One of the sources confirmed the contract extension was under Spanco's existing vehicle fleet concession with the government to supply Toyota Vellfire 2.5, in place of Proton Perdana as the latter was ageing.
"The contract involves a four-year leasing tenure to supply and maintain the vehicles, which may be used mostly by government officials including ministers," the source told the New Straits Times (NST) recently.
Spanco, which has been maintaining the government fleet since 1994, did not immediately respond at the time of writing.
Another source said the overall contract would be cheaper and viable for the government to lease from Spanco due to the higher resale recovery rate of the Vellfire.
"There is no issue to extend the contract as the government is not buying the Vellfire but rather leasing the vehicles," he told the NST.
Subsequently, Spanco would maintain the vehicles throughout the leasing tenure, he added.
Industry observers, meanwhile, said the existing Proton Perdana, which was a rebadge of the eighth generation Honda Accord, would not be economical and practical to operate.
This was mainly due to the production expiry of the vehicle, making it costly for the government to maintain and outsource its spare parts.
"It will be costly for the government to maintain the Perdana as Honda does not produce its spare parts anymore," said one of them.
The observer said Proton Holdings Bhd could not produce a D-segment vehicle to replace the Perdana since its strategic alliance with Zhejiang Geely Holding Group (Geely) in 2017.
"Under the new alliance, Proton's D-segment might not have the volume in the Malaysian market as most of the vehicles under this segment only available in China under Geely, which are the left-hand drive models.
"There is no vehicle in Proton's D-segment that could replace the Perdana. Therefore, the government decided to use other marquees."
He added Proton would need to fork out hefty capital for research and development and requires sufficient volume to invest in the right-hand models for the Malaysian market.
Sources said a total of 3,000 Perdanas had been supplied to the government involving 800 units of the 2.4-litre version and 2,200 units of the 2.0 variant. Some of the Perdanas included the stretched version.
Spanco had supplied other Proton models involving 10,000 vehicles such as the Preve, Persona and Saga, they added.
NST recently reported that the government had yet to finalise the new concession of its vehicle fleet management, although the winning bidder was identified about 20 months ago.
The report quoting sources as saying that the government was still in discussions with the winning bidder to iron out the terms and conditions of the new concession.
"Until the new concession was finalised, the government was continuing its contract with Spanco.
"It (the current arrangement) is not a new contract or one-off contract. The contract value is not a subject matter. Let the government confirms (the contract details)," a source said.
Following the end of Spanco's 25-year concession in 2018, the government had asked interested parties to submit a request-for-proposal on the fleet concession.
Spanco managed the government's vehicle fleet through a concession agreement dated October 30, 1993.
The agreement expired on December 31, 2018.
The new concession is believed to have a shorter period as the government plans to trim its operational expenses.
In early February 2020, the Finance Ministry announced that it had chosen the new concessionaire to manage its fleet of vehicles but did not name it.