TAN CHONG MOTOR HOLDINGS BERHAD
Annual Report 2014
6
REPORT OF THE BOARD OF DIRECTORS
DIVIDENDS
The Board recommends the payment of a final single tier
dividend of 6% (2013: single tier 12%) for shareholders’
approval at the forthcoming Annual General Meeting.
Combined with the interim single tier dividend of 6%
(2013: interim dividend of 12% less tax of 25% and special
dividend of 18% less tax of 25%) paid on 29 September
2014, the total net dividend for the year is 6.0 sen per share
(2013: 17.25 sen per share). The net dividend payment for
FY 2014 will be RM39.2 million (2013: RM112.6 million).
In line with the lower profitability in FY 2014 recorded by
the Group and to retain sufficient funds in the Company for
future expansion ensuring sustainable growth of the Group,
lower dividend payments were recommended in FY 2014
compared to previous year.
REVIEW OF OPERATING PERFORMANCE
Vehicles Assembly, Manufacturing, Distribution & After
Sales Services (automotive)
The sales of new motor vehicles in Malaysia or Total
Industry Volume (TIV) in 2014 recorded a high of 666,465
units of vehicles, representing an increase of 1.6% from
2013 [
source: Malaysian Automotive Association (MAA)
].
The National Automotive Policy 2014 was announced on 20
January 2014 setting out the Government’s policy on the
development of the automotive industry.
Despite the tough competition on the domestic front, the
Group maintained its top 3 position in the non-national car
market segment in 2014 with a market share of 7%. The
Nissan Almera continues to be a favourite choice amongst
customers looking for B-segment car. Tan Chong Motor
Group also enhanced its efforts in offering more and fresh
model choices with competitive pricing to our customers.
New models launched in 2014 include the All New Nissan
Sylphy, New Nissan Teana, New Nissan X-Gear, Nissan
2010
2,000
4,000
6,000
2011 2012 2013
2014
Revenue
(RM’million)
Elgrand and CKD version of Nissan Serena S-Hybrid to
cater for customers looking for motor vehicles in C, D, MPV
& luxury MPV segments.
The premium brand Infiniti saw the launch of the new Infiniti
Q50 expanding the model line-up of Infiniti cars offered in
Malaysia.
The Renault brand also received a boost with new models
launch such as Renault Koleos and the Renault Fluence.
The latter model is locally assembled in our plant.
To complement the value chain in the automotive trade,
Tan Chong Motor Group has also embarked on dealing
in used motor vehicles by establishing the MUV Division
where used motor vehicles quality are graded by our team
of trained inspectors for customers’ convenience.
As part of the Group’s continuing efforts to improve
customers’ services and after sales experience, we have
invested in 3S (sales, services and spare parts) centres
throughout Malaysia. New 3S centres have been opened in
Glenmarie Shah Alam (Selangor), Tawau (Sabah), Kuching
(Sarawak) and existing showrooms and after-sales service
centres have undergone upgrade and expansion.
On the regional fronts, the automotive sector of Vietnam
has shown signs of recovery with a slightly higher TIV and
some signs of economic improvements albeit a fragile
growth hampered by a weak Vietnamese Dong. Nissan
Vietnam Co Ltd (“NVL”) has successfully appealed to the
Vietnamese tax authorities on the customs tax issue for
which the provision of RM56 million (equivalent to US$16.98
million) made in prior year was reversed in FY 2014. The
positive resolution of this issue enables NVL to focus on
the business at hand. NVL has also successfully launched
the premium brand Infiniti in Vietnam with the introduction
of Infiniti QX60 and Infiniti Q50 to penetrate the premium
passenger cars segment in Vietnam. The Nissan Sunny
(known as Nissan Almera in Malaysia) which is assembled
in the Group’s assembly plant located in Da Nang City,
Vietnam continues to be well received since its launch in
mid-2013. The Group’s revenue from Vietnam was RM165
million (2013: RM179 million).
