Edaran Tan Chong sees poorer outlook

  • Business
  • Saturday, 22 Oct 2011

SUBANG JAYA: Edaran TAN CHONG MOTOR Sdn Bhd expects poorer outlook for the first half of next year due to the floods in Thailand disrupting its carparts supply chain.

Although it does not import cars from the neighbouring country, the Nissan vehicle distributor gets carparts from Thai manufacturers to assemble here.

Executive director Datuk Dr Ang Bon Beng said that in view of the floods and global economic uncertainty, “the first half of next year will be very challenging.”

“The (sales) momentum will be compromised and we may not get the numbers, but perhaps the second half will see improvements, depending on how Thailand addresses its flood problems,” Ang told reporters after showcasing the new Livina X-Gear.

He said that currently there was no immediate negative impact from the floods as the company had two to three months of carparts supply on standby to keep operations going.

“Our business approach is to keep two to three months of stocks, but if the Thai disaster does not recover (during this period), a new situation will arise,” Ang said, explaining that the Nissan recovery team was working on alternatives for the supply chain should the floods outlast the supply at hand.

“The recovery team is working closely with the Thai team to address the issue, and I am confident they can handle the situation efficiently,” he said of the team that previously dealt with the Japan tsunami.

He added that the company could source carparts from other manufacturers in China, Japan or Indonesia.

Asked if a supply chain disruption will cause a hike in the price of carparts, Ang ruled out the possibility but added that it was too early to tell if there could be delays in delivering vehicles to customers.

He said the intended market share for Nissan remained at 5.7% with an expected 1% increase next year.

On the Malaysian Automotive Association's total industry volume forecast of 605,000 units this year, Ang believed that it was still achievable.

For the third quarter of 2011, the average of monthly TIV is 51, 000 units.

On another note, Ang said the company planned to make a “reasonable investment” for expansion, with at least 10 new showrooms in the next five years. There will also be a consolidation of smaller showrooms and upgrade of facilities to provide both sales and services to customers.

It will also introduce new vehicles in the segment it is currently under-represented.

“We don't have A-segment cars (yet), but I am confident we will be able to fill 95% of the segment in the coming five years,” he said.

Edaran Tan Chong, the wholly-owned subsidiary of Tan Chong Motor Holdings Bhd, is the local sales and marketing arm for Nissan vehicles.

Meanwhile, the Livina X-Gear is the first completely-knocked-down B-segment (Toyota Vios and Honda City) crossover vehicle in Malaysia. It has received 1,500 bookings since its launch in early September.

Nissan's zero emission electric vehicle will enter the Malaysian market in the first quarter of next year.

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