PETALING JAYA: Local automotive manufacturers and distributors are slowly but surely being overwhelmed by Chinese marques with their sleek designs and top-of-the-line technology for both electric and conventional fuel vehicles.
Among them are Tan Chong Motor Holdings Bhd, which saw its losses widen in the third quarter ended Sept 30, 2024 (3Q24) compared to the third quarter ended Sept 30, 2023 (3Q23) due to the competitive landscape, which has been further exacerbated by the aggressive Chinese marques.
The company, which manufactures and distributes Nissan and Renault vehicles in Malaysia, has suffered eight quarters of losses since 4Q22 and analysts have cut their target price as well as called a sell on the shares.
New models could turn the tide, but it will be a long haul as the company’s domestic market share dropped to 0.8% in the first half of 2024 compared to an average of 2.3% from 2020 to 2023, according to a note by MARC Ratings published in October, which points out that Tan Chong’s foreign ventures have also underperformed.
GAC Aion Y Plus is an all-electric vehicle.
The company is said to be launching the Nissan Kicks e-Power, a B-segment compact SUV next week at the Kuala Lumpur International Mobility Show, with competitive pricing below RM130,000.
According to analysts, the compact SUV segment is crowded, with competition from Honda’s HR-V e:HEV and Toyota’s Corolla Cross Hybrid but the Nissan Kicks’ fuel-saving technology may lure those looking to save when the RON95 petrol subsidy rationalisation is implemented.
Another way to improve its prospects is through listed subsidiary Warisan TC Holdings Bhd, which is the exclusive distributor and assembler of GAC hybrid, conventional fuel and electric vehicles in collaboration with Guangzhou Automobile Group Co Ltd.
Tan Chong’s prospects look grim, and there is no telling whether its new models will be well-received given the competition.
The only hope is that the company can ramp up the appeal of the Kicks to cost-conscious car buyers as the automotive market continues to evolve.
