Group MD expects earliest feedback on the agreement by middle or end of 2020
by RAHIMI YUNUS / pic by MUHD AMIN NAHARUL
DRB-Hicom Bhd, via its wholly owned subsidiary Hicom Automotive Manufacturers (M) Sdn Bhd, is expected to add two new vehicle brands under its portfolio that would further strengthen the group’s automotive business.
Group MD Datuk Seri Syed Faisal Albar said the company is in talks with two new auto brands to assemble their cars in Malaysia by Hicom Automotive.
“We are still discussing for now. It depends on whether they will agree or not. If any, the earliest would be in the middle or end of 2020,” Syed Faisal said in a recent briefing in Melaka.
Syed Faisal said Audi is not one of the two brands that the company is currently discussing with for the assembly.
At present, DRB-Hicom controls about 32% of market share in the local automotive industry through a distributorship and/or jointly-controlled companies for Honda, Mitsubishi, Isuzu, Volkswagen, Audi and Tata commercial vehicles. The group also assembles Mercedes-Benz cars in Pekan, Pahang.
DRB-Hicom holds a 50.1% stake in Proton Holdings Bhd, while Zhejiang Geely Holding Group Co Ltd holds the remaining 49.9%.
Additionally, the conglomerate owns 81% of Edaran Modenas Sdn Bhd, and distribute Kymco and Suzuki motorcycles in Malaysia.
DRB-Hicom has returned to the black in the third quarter ended Dec 31, 2018 with a net profit of RM73 million against a net loss of RM70.03 million in the same period a year ago, partly boosted by Proton.
Improvements across its automotive, services and property businesses saw its revenue increased 9.31% year-on-year to RM3.17 billion.
Its automotive sector has contributed close to 60% of the group’s revenue, while services accounted for 35% and 6% was from the property division.
Meanwhile, Syed Faisal said DRB-Hicom is optimistic that its aerospace manufacturing company, Composites Technology Research Malaysia Sdn Bhd (CTRM), will achieve a RM1 billion revenue in the near term.
CTRM, a “super Tier-2” supplier to original equipment manufacturer Airbus SE, registered a RM922.8 million revenue for the financial year ended 2018.
CTRM produces, among others, fan cowls for the A320s and A350s, wing and tail components. Its orderbook stands at RM9.5 billion as at March 2018.
Separately, Syed Faisal said DRB-Hicom is also expected to complete the RM944.6 million Alam Flora Sdn Bhd divestment to Malakoff Corp Bhd by the end of this year on gaining the relevant approvals.