KUALA LUMPUR: Cycle & Carriage Bintang Bhd, which has been a loyal dealer for Mercedes Benz for over 60 years, considers making a move to expand its dealership to other car brands.
This came after Daimler AG exercised its call option to buy the firm’s 49 per cent stake in Mercedes-Benz Malaysia (MBM).
Cycle & Carriage, however, reiterated that the exercise will not impact its trading operations but admitted that the profitability will be negatively affected following the cessation of dividends from MBM.
Its chief executive officer Wilfrid Foo Tsu-Jin said the firm was open to the idea of distributing car brands other than Mercedes Benz as part of its medium to long term growth strategies.
“We are open to opportunities in the medium and longer term. It could be rightly so for any business to be able to improve and grow. So, definitely we are open whether it comes to a point of distributing other car brands,” he said after Cycle & Carriage’s annual general meeting (AGM) here today.
The AGM took longer than usual as shareholders took the opportunity to express their concerns over the firm’s outlook moving forward.
The news over the disposal of Cycle & Carriage’s 49 per cent stake in MBM was negative to analysts, saying that the move will strip off the firm’s recurring dividend income amounting to RM11.02 million.
Following the disposal, analysts had cut their core earnings per share down by 38 per cent-57 per cent for Cycle & Carriage’s financial year 2019 and 2020 estimates.
Meanwhile, Foo said Cycle & Carriage aims to grow its retail business by continuing to invest in its sites, systems, and people to position itself to capture future growth.
This refutes a daily newsreport which said that the firm planned to exit the retail operations of Mercedes-Benz cars in Malaysia and sell the business to MBM.
“We have been present for 120 years and we plan to be in the business for 120 years more. We will continue to focus on its business improvement strategies, as well as investing in our sites, systems and people to ensure it builds a business that is well positioned to continue delivering exceptional journeys to its customers,” he said.
The group continues with its upgrading plans to support MBM’s network development and upgrades, he added.
“These initiatives are aimed at enhancing the group’s ability to capture growth and deliver long term sustainable results.”