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KUALA LUMPUR: Tan Chong Motor Holdings Bhd
's unit TC Motor Vietnam Co Ltd has entered an agreement with Xiamen King Long United Automotive Industry Co Ltd to be the assembler, sole and exclusive distributor and service provider of the King Long XMQ6829Y coach model.
King Long is a company incorporated in the China that specialises in the design, production and sale of various buses, minibuses and coaches.
The agreement shall be for a period of five years, which may be extended upon mutual agreement by the two parties.
Tan Chong said it entered the agreement to facilitate its penetration into a different bus/coach segment.
"King Long had experience in Vietnamese market from year 2006 – year 2010 via its collaboration with a local automotive corporation in Vietnam.
"The securing of the King Long franchise will enable TCMV to complete its application for manufacturing licence from the Vietnamese authorities," it said.
Tan Chong's working capital requirement for the new King Long business in Vietnam for the first five years of operations is estimated at US$9mil, including the purchase of equipment and construction of a plant that is expected to start operation in Q4 2018.
The group said it does not expect the new business to contribute significantly to its revenue and profit for the financial year ending Dec 31, 2018, but it is expected to contribute positively over the long term.
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