PETALING JAYA: Mercedes-Benz dealer Cycle & Carriage Bintang Bhd sold more cars in the first quarter but consumers’ shift towards lower-end models, where competition is stiffer, resulted in compressed margins for the company.
It made a loss of RM2.69mil in the three months ended March 31 on a revenue of RM388.6mil.
“Although competition in the first quarter remained intense, the group was able to benefit from slightly improved trading sentiment and enhanced sales performance to deliver better results in both retail and after sales,” chairman Haslam Preeston said in a statement.
“This increase was, however, offset by higher operating expenses and financing costs,” he said.
Unit sales at C&C Bintang rose 21% in the first quarter, with the sales mix moving from S-Class to the C, GLC and E Classes.
“While higher sales volumes reflected early results from the group’s business improvement programme, margins remain highly compressed as a result of demand shifting to the lower-priced models,” Haslam said.
Mercedes-Benz trading operations produced a net loss of RM2.7mil, compared with a profit of RM300,000 in the same period in 2017.
“While the group benefited from slightly improved trading conditions in the first quarter, markets are expected to remain challenging for the rest of the year,” he said.