TAN CHONG MOTOR HOLDINGS BERHAD
Annual Report 2014
7
REPORT OF THE BOARD OF DIRECTORS
The automotive sector in the regional countries is expected
to remain in a cautious recovery mode in the midst of the
macro-economic uncertainties tempered by the impact of
regional geo-political uncertainties that we witnessed in
Vietnam last year.
The impact of the recent slump in global oil prices and
the uncertainties to the economies in the region, including
Malaysia, continues to be a source of concern.
Going forward in this challenging environment, continuous
improvements in operational efficiency, striving for cost
effectiveness and moving up the value chain of key business
segments will be a recurring theme within the Group as we
dig in our heels and prepare for strong headwinds in the
journey ahead. To remain competitive, we must continue
to strengthen our foundation by delivering end-to-end
satisfaction to our customers from the initial contact point
up to and beyond after sales services.
We remain steadfast to our strategic commitments in
expanding to the regional markets in anticipation of Asean’s
goal of economic integration via the Asean Economic
Community (AEC). The Group’s foothold in the last of
the emerging markets in this region will provide us with
opportunities to tap into the future growth of these economies.
The Group continues to maintain a meticulous approach in
managing our investments, both domestic and overseas, to
ensure sustainable development of the present businesses
and to be ready to capitalise on future growth.
ACKNOWLEDGMENT
Our people are our greatest asset and it is through teamwork,
we make things happen. The Board extends its thanks to
the management and staff of Tan Chong Motor Group for
their hard work, dedication and commitment.
The Board also wishes to express its appreciation to the
valued principals, customers, business partners and loyal
shareholders for their confidence in the Group and look
forward to their continued support in the years to come. To my
fellow Board members, I would like to express my gratitude for
your valued advice, guidance and contribution to the Group.
On behalf of the Board of Directors, I also wish to record a
note of appreciation and thanks to Mr Ling Ou Long @ Ling
Wuu Long who has attained the age of 70 and will not be
seeking re-appointment as a Director at the coming Annual
General Meeting, for his invaluable contribution to the Group
during his long service of more than 40 years to the Group.
On behalf of the Board,
Dato’ Tan Heng Chew
President
31 March 2015
Tan Chong Motor Group’s footprint in the Indo-China region
is a tangible sign of our commitment to Nissan Motor Co
Ltd. This together with the strong relationship built over
many years from humble beginnings which started from
a small shop lot in Kuala Lumpur has strengthened the
strategic partnership between Tan Chong Motor Group and
Nissan Motor Co Ltd.
Financial Services (hire purchase and insurance)
The financial services division performance has posted
stronger revenue and profits compared to previous year.
Revenue and EBITDA has increased to RM53 million and
RM17 million in FY 2014 respectively compared to RM41
million and RM16 million in FY 2013.
RM198 million was issued as Notes Series 2014-A under the
Asset-Backed Securitisation programme for hire purchase
receivables on 14 November 2014. This provided the Group
with ample liquidity to enhance the hire purchase financing
activities.
PROSPECTS AND STRATEGIC DIRECTIONS GOING
FORWARD
We foresee muted or no growth in the domestic automotive
market for 2015. There are several key challenges to the
automotive sector in 2015. The surging US Dollar encouraged
by positive sentiments of US economic growth and a weaker
Malaysian Ringgit will put pressure on costs of imported
knocked-down kits in a business environment that is facing
higher operating costs. The lacklustre consumers’ sentiments
driven by rising costs of living on the back of a depreciating
Ringgit and on-going subsidies rationalization coupled with
a slew of news on cost-cutting and job-cutting measures
by corporations may result in self-imposed belt-tightening
measures by the consumers. In the background, uncertainties
over the GST impact on prices of goods and services will
continue to weigh on the consumers’ mind. A confluence
of these factors may temper consumers’ enthusiasm. The
automotive sector will face increased pressure to sustain
cars sales in 2015 and we will continue to witness intensified
competitive forces being displayed in the market.
