PETALING JAYA: Despite widening losses for its fourth quarter ended Dec 31,2020, Tan Chong Motor Holdings Bhd (TCM) remains optimistic about maintaining its 3% total industry volume (TIV) market share for this year.
The group expects to maintain its hold on TIV by leveraging off the ongoing tax holiday, as well as the introduction of new vehicles that it anticipates will help boost sales.
CGS-CIMB in a report yesterday said the group is aiming to maintain its domestic market share at approximately 3% of TIV in 2021, driven by new models such as the Nissan Almera and Navara pick-up truck.
“We also expect the group to ride the ongoing sales tax holiday in the first half of 2021.”
Following a briefing with TCM recently, CGS-CIMB said total sales volume slid 34% year-on-year in 2020, due to lower sales in Malaysia and overseas markets comprising Cambodia, Laos, Myanmar and Vietnam.
“In spite of the lower sales, we saw encouraging sales recovery in the Malaysian operations as the group, together with the entire domestic automotive sector, benefitted from the sales tax holiday announced under the Penjana stimulus package. TCM’s sales volume in Malaysia grew 4% quarter-on-quarter in the fourth quarter of 2020.”
For its fourth quarter ended Dec 31,2020, TCM reported a net loss of RM69.63mil, compared with a net loss of RM1mil in the previous corresponding period.
Revenue in the fourth quarter dropped to RM747.90mil compared with RM974.61mil a year earlier.
For its financial year ended Dec 31,2020, TCM recorded a net loss of RM165.58mil compared with a net profit of RM43.65mil in the previous corresponding period, while revenue slid to RM2.96bil compared with RM4.17bil a year earlier.
CGS-CIMB said TCM’s Cambodia, Laos, Myanmar and Vietnam markets’ sales volume plunged 53% quarter-on-quarter in the fourth quarter of 2020, mainly due to the discontinuation of the distribution of the Nissan Sunny and X-Trail completely-knocked down models by Nissan Motor Corp in Vietnam as at end-September 2020.
“Vietnam sales volume dropped 66% quarter-on-quarter in the fourth quarter of 2020. While the group said that the impact was cushioned by sales of MG vehicles in Vietnam, we do not project a meaningful recovery in Vietnam sales volume in 2021 amid the pandemic.”
Additionally, CGS-CIMB said TCM had also indicated that it has fully provided for the out-of-court settlement of the Royal Malaysian Customs Department’s bills of demand related to previously outstanding excise duties, with a revised amount of RM109mil (from RM180mil previously) in 2020.
“We see this as a positive development for the group, given that TCM’s management will be able to refocus on managing its operations instead of handling court issues.
“The group does not expect the bills of demand to affect its financial performance in 2021.”