Tan Chong International’s profit drops 86.6% in first half of 2024 due to “sharp decline” in Subaru car sales
Singapore- and Hong Kong-based Tan Chong International (TCIL) appears to be in dire straits at the moment – the group that owns Motor Image, Asia’s largest Subaru distributor, reported an 86.6% drop in profits in the first half of 2024 due to problems in its automotive business.
In one Profit Scene In a statement to investors on Monday, the company said its profit after tax fell to HK$25 million (RM15 million), compared to HK$187 million (RM112.6 million) in the same period last year. This was attributed to “significant declines in sales”, with significant losses in the CKD markets in Malaysia and Thailand and the CBU markets in Taiwan, Singapore (where TCIL is also a Nissan distributor) and the Philippines.
The only bright spots were its Singapore and Japanese subsidiaries, automotive and financial services provider Ethoz Group and logistics company Zero, both of which reported growth in the first six months of the year.
Despite the “very challenging circumstances,” TCIL said the company’s overall financial position and operational readiness remain “stable and strong.” The company also expects a recovery in the second half of the year, citing “relatively strong” bookings in its automotive division.
The severe lack of sales may have played a part in Subaru’s decision. Withdrawal from completely knocked down (CKD) domestic assembly operations in Southeast Asiaincluding not only Malaysia and Thailand but also Vietnam and Cambodia. These markets will Convert to complete built-up (CBU) model Starting next year, cars will be imported from Japan.
Subaru has been assembling vehicles in Malaysia at the Tan Chong Motor Assemblies (TCMA, a subsidiary of Tan Chong Motor Holdings) plant in Segambut since late 2012build XV; the foresterbefore is also a CKD modelare now completely imported. The move to stop local assembly is likely to have a significant impact on sales, as prices are expected to rise in these markets, putting further pressure on TCIL’s net profit.
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