Thursday 28 Mar 2024
By
main news image

GEORGE TOWN (Oct 15): Edaran Tan Chong Motor Sdn Bhd (ETCM) said it is may increase the prices of its Nissan models next year, if the ringgit continues to depreciate against all major currencies.

In a statement, it said despite implementing numerous cost rationalisation and efficiency optimisation exercises to mitigate the ringgit impact on ETCM’s business, some cost might have to be passed to consumers.

“As a result, ETCM (wholly-owned by Tan Chong Motor Holdings Bhd) may have to consider raising the prices of its Nissan models in 2016,” it said.

Nevertheless, ETCM executive director Datuk Dr Ang Bon Beng said despite the adversities, the company remained committed to providing its customers with quality, value-added products and the highest level of customer services.

“The company will continue to seek and review opportunities for more strategic operational effectiveness and efficiencies within the business and with our partners, in order to ensure that the current prices of Nissan vehicles remain unchanged this year,” he added.

ETCM’s dilemma echoes the widespread sentiment among automobile makers in the country, who find themselves being stuck in a `catch 22' situation, as reported in The Edge Financial Daily today.

It was said that the protracted slump in the ringgit’s value against all major currencies, particularly the US dollar, was eroding carmakers’ profit margins, with some expected to lose 6% of their net profits, from every 1% weakening of the local currency against the US dollar.

Already, vehicle sales for the first eight months of the year dropped 2.3% on-year to 434,282 units, prompting the Malaysian Automotive Association (MAA) to cut its 2015 total industry volume (TIV) forecast to 670,000 units, from 680,000, it said.

At 4.15pm, Tan Chong Motor Holdings (fundamental: 0.55; valuation: 1.4) fell six sen or 2.27% to RM2.58, with 18,300 shares done, for a market capitalisation of RM1.72 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

      Print
      Text Size
      Share