Thursday June 21, 2012
MBM to wait and see
By THOMAS HUONG
SHAH ALAM: MBM Resources Bhd is waiting for the revised National Automotive Policy (NAP) to be announced before making decisions on its planned vehicle assembly business.
“Until the NAP (revised) is out, we are not going to make major decisions. We will wait until we get a clearer picture of the environment for the automotive industry,” said managing director Looi Kok Loon after MBMR's AGM yesterday.
Looi remained tight-lipped about the group's potential foreign partner for vehicle assembly in Malaysia.
“It is too early to say anything. We are still pursuing the strategy of having the right partner in Malaysia.”
Looi pointed out that MBMR's capital expenditure (capex) would hit RM180mil this year, which was the highest in the group's history, as it accelerated its transformation into a complete automotive group.
This is part of the RM250mil capex allocated for 2011 till end-2013.
This includes MBMR's investment in expanding its retail network, the setting up of body and paint centres by Federal Auto and Daihatsu (M) Sdn Bhd, the construction of Oriental Metal Industries (M) Sdn Bhd's new alloy wheel manufacturing plant in Rawang, as well as research and development and new production capabilities at airbag manufacturer Hirotako Holdings Bhd.
“This year, 70% of the capex will be for the manufacturing side and the balance for building the distribution network,” said Looi.
Looi also said the group's strategy of having a diverse range of vehicle brands had translated into strong sales performances.
Commercial vehicle brands in the group's stable include Daihatsu, DongFeng and Hino while passenger brands are Perodua, Volvo, Volkswagen and Mitsubishi, in addition to sports tuning brands ABT and HeicoSportiv.
In the first quarter of this year, the group's sales of 5,860 vehicles was slightly higher compared with 5,852 units a year earlier, while new vehicle sales in the country decreased 12.6% year-on-year.
Last year, the group increased its vehicle sales by 1.7% year-on-year to 23,236 units while total industry volume (TIV) in Malaysia fell 0.9%.
“We have outperformed the market,” said Looi.
“Despite an increasingly challenging operating environment, we believe that we are in a very strong position to maintain our growth trajectory. We should see our target of RM2bil in revenue this year,” he said