News

1. Introduction

The Board of Directors of Tan Chong Motor Holdings Berhad (“TCMH” or “Company”) wishes to announce that TC Services Vietnam Co., Ltd (“TCSV”), an indirect wholly-owned subsidiary of TCMH, had on 2 February 2024 entered into an Agreement of Distribution and Service (“Agreement”) with GAC Motor International Co., Ltd. (“GAC Motor International”) for the appointment of TCSV as a distributor to import, distribute and sell the Vehicles (fuel vehicle) and Spare Parts, and provide after­-sales services on the Vehicles in Vietnam.

2. Information on TCSV

TCSV is an indirect wholly-owned subsidiary of TCMH incorporated in Vietnam authorised to engage in retail distribution of various kinds of automobiles, provision of automotive maintenance and repair and spare parts services in accordance with the laws of Vietnam.

3. Information on GAC Motor International

GAC Motor International is a company incorporated under the laws of Hong Kong, with its business address at Room 801, Citicorp Centre, 18 Whitfield Rd., Causeway Bay, Hong Kong. GAC Motor International is a subsidiary of GAC International Co., Ltd.. GAC International Co., Ltd. is a subsidiary of Guangzhou Automobile Group Co., Ltd.. (“GAC Group”). Guangzhou Automobile Group Co., Ltd. is a subsidiary of Guangzhou Automobile Industry Group Co., Ltd. The manufacturer of fuel vehicles is GAC Motor Co., Ltd. (a subsidiary of GAC Group).

GAC Group was founded in 1997 and headquartered in Guangzhou, China. It is a large state-owned holding company listed in both Shanghai and Hong Kong Stock Exchanges with over 93,000 employees at present.

GAC Group is principally engaged in the research, development, manufacture, and sale of vehicles and motorcycles, and parts and components, and provision of commercial and financial services, and mobile travel service in Mainland China. It offers large to medium sized passenger vehicles, light and heavy trucks, construction vehicles, and energy vehicles; motorcycles comprising standard motorcycles, sport bikes, scooters, etc.; auto-parts and accessories. Since 2010, GAC Group has successively launched a series of models covering sedan, SUV, MPV, PHEV and NEV. In 2020, GAC Group produced and sold more than 2 million vehicles. GAC Group has set up manufacturing plants in Guangzhou, Xinjiang, Yichang and Hangzhou.

4. Salient Terms of the Agreement

Pursuant to the terms and conditions of the Agreement, GAC Motor International grants TCSV with the following rights as a Distributor in the Socialist Republic of Vietnam (“Territory”):

(a)    to import, distribute and sell Vehicles and Spare Parts;

(b)    to provide after-sales services on the Vehicles; and

(c)    to appoint Sub-distributors to sell, distribute and perform after-sales services for the Vehicles and Spare Parts.

The term of the Agreement shall be for a period of three (3) years commencing from the date of execution of the Agreement by both TCSV and GAC Motor International. The Agreement may be renewed by either party by serving written notice at least three (3) months prior to the expiry of the Agreement.

5. Rationale

The Agreement will provide TCMH Group with opportunity to expand its foothold in the automotive industry in Vietnam.

6. Financial Effects

The Agreement is not expected to have any material effect on the earnings per share, net assets per share and gearing of TCMH Group for the financial year ending 31 December 2024, and has no effect on the share capital of TCMH and shareholdings of its substantial shareholders.

7. Directors' and Major Shareholders' Interests

None of the Directors, major shareholders and/or persons connected with the Directors and major shareholders of TCMH, has any interest, direct or indirect, in the Agreement.

8. Approval Required

The Agreement is not subject to the approval of the shareholders of TCMH or any relevant authorities.

9. Directors' Statement

The Board of Directors of TCMH is of the opinion that the Agreement is in the ordinary course of business and is in the best interest of TCMH Group.

This announcement is dated 5 February 2024.