Business

Friday July 8, 2011

Sime Darby Motors expects to sell 70,000 vehicles in 8 countries

By THOMAS HUONG
huong@thestar.com.my


CHENGDU, CHINA: Sime Darby Motors (SDM) is expecting at least a 23% year-on-year jump in vehicle sales or more than 70,000 units sold in the eight countries it operates in for the current financial year ended June 30 (FY11).

In the previous financial year ended June 30, 2010 (FY10), SDM sold 56,836 vehicles in China, Hong Kong, Macau, Malaysia, Singapore, Thailand, Australia and New Zealand. SDM is the automotive division of conglomerate Sime Darby Bhd.

Sime Darby executive vice-president (motors division) Datuk Lawrence Lee Cheow Hock said SDM's operations in China contributed sales of between 25,000 to 27,000 vehicles for FY11.

“The car market in China contributes around 30% of our profits,” Lee said during a media tour of the company's new BMW 4S (sales, service, spare parts, systems) dealership in Chengdu, the capital of Sichuan province yesterday.

The BMW marque accounted for the bulk of vehicle sales for SDM's operations in China, Hong Kong and Macau. A total of 24,487 BMW cars were sold in China, Hong Kong and Macau during FY11 (a 66% year-on-year jump compared with 14,785 BMW cars sold during FY10).

SDM also sold 996 units of Rolls-Royce, Lamborghini, Jaguar and Land Rover premium and luxury cars in China, Hong Kong and Macau during FY11.

Another 1,794 units of Mitsubishi, Suzuki and Smith Electric vehicles were sold by SDM in Hong Kong and Macau during FY11.

Lee said SDM's contribution to the Sime Darby group's revenue was likely to surpass the plantation division for the first time in FY11.

“This could well be the case (looking at the group's financial results as of the third quarter of FY11),” he said, adding that SDM hoped to double its volume of business within five years, spurred by strong growth in the China car market.

For the nine months ended March 31, the Sime Darby group recorded a RM29.7bil revenue, with SDM contributing 34% (RM10.24bil) and the plantation division coming in as the second largest revenue contributor with 31% (RM9.14bil).

However, in terms of the group's pre-tax profit, SDM was only the third largest contributor with 12% (RM441mil), compared with the plantation division's contribution of 56% (RM2bil) and industrial division's contribution of 19% (RM699mil).

Vehicle operations in China, Hong Kong and Macau were the largest revenue (RM4.6bil) and pre-tax profit (RM267mil) contributor to SDM during the period under review.

SDM ventured into the China market in 1994, where it retails BMW, MINI, Rolls-Royce, Lamborghini, Jaguar and Land Rover marques.

It has 12 4S outlets, four after-sales service centres and six showrooms for the six car marques it represents in China.

Its BMW dealership operations are located in major cities such as Shenzhen, Guangzhou, Shantou, Hainan, Kumning, Changsha and Chengdu while Rolls-Royce and Lamborghini dealerships operate in Shanghai and Hangzhou.

SDM's new BMW 4S centre in Chengdu, built at a cost of 120 million yuan (RM56mil), is the largest of its kind in China, with a floor area of 26,000 sq m.

The company is planning to open another BMW 4S centre in Chongqing city, southwest China within the next 12 to 18 months, while a McLaren car showroom and after-sales service centre is due to open in Hong Kong in the third quarter of this year.

SDM represents 32 vehicle marques ranging from premium brands such as BMW, Porsche and Rolls-Royce to various mass market brands like Hyundai and Mazda and also commercial vehicles such as Hino and Mack, and has 6,700 employees across the Asia-Pacific region.

In Malaysia, SDM is involved in the distribution and retail of BMW, MINI, Porsche, Ford, Hyundai, Land Rover and Alfa Romeo marques.

It also operates the Inokom vehicle assembly plant in Kulim, Kedah and holds the exclusive franchise for the Hertz car rental business in Malaysia.

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