Bayerische Motoren Werke AG (BMW), the worlds number 2 luxury car maker, and Sime Darby Bhd will announce today details of a new distribution venture that will give the German company more control and a larger share of vehicle sales in Malaysia.
BMW and Sime Darby have been in talks to complete a new distribution agreement since May last year. Sime Darby currently holds exclusive rights to distribute BMW vehicles in Malaysia, Hong Kong and Singapore.
BMW wants to take advantage of a free trade agreement in some South-East Asian countries that will lower tariffs on imported goods, including motor vehicles, this year.
DaimlerChrysler AG took over the wholesale distribution of Mercedes-Benz vehicles in Malaysia from Cycle & Carriage Bintang Bhd in September.
Sime Darby, whose diversified interests also include property and plantations, earlier said an agreement giving BMW more control would dent its earnings.
The group also sells Caterpillar Inc equipment and has electricity and housing businesses.
Auto distribution accounted for 26% of its profit of RM771.2mil for the year ended June 30, 2002. Bloomberg.