CCB or Cycle & Carriage Bintang BHD is expecting for its new spare parts division, the Cycle & Carriage Parts and Accessories Sdn Bhd (CCPA) to contribute substantially to earnings of the company for the next three to five years.
The CCPA was set up last June 2006 since the company saw these great opportunity in auto spare parts distribution, said managing director Steve Foster. The Cycle & Carriage parts and Accessories manages all of the group's parts businesses including imports parts from China, Indonesia, Japan, Thailand, and Taiwan. CCPA is also the one responsible for distributing auto parts and accessories like to local after-sales market, including original equipment manufacturers and replacement market for cars of various makes.
Speaking after CCB's AGM recently, Foster said, "The new division has to generate double-digit (in million ringgit) contribution to overall profit. Otherwise, it is not worth to be in it at all." Foster has also added that the new division strategy was to source for the right products and develop strong relationships with its clients, like service centers and workshops operators.
In addition CCB has already estimated the turnout for its local after-sales market and said that it is expecting for RM18bil. The CCPA with an authorized capital of RM100,000 will operate at CCB's plant in Petaling Jaya.
With regards to vehicle distribution, Foster said that the CCB has responded to the National Automotive Policy by partnering with Hong-Kong-based Sinotruk last year to locally assemble and distribute China's best-selling trucks which were scheduled for launching in September. He also said that the initial investment for the venture was RM5mil which were mainly used for the purchase of jigs and tools since production would be undertaken at its existing assembly facility in Petaling, Jaya.
Foster stated that the truck market is currently valued at 4,000 units annually and the group is hoping to capture at least 12 percent of the market share. In terms of car sales, Foster mentioned that although there is a decline in the sales of Peugeot and Mazda brands, it is supplemented by the Mercedes-Benz segment that is currently recording a steady growth in the first quarter.
Cycle & Carriage Bintang BHD has about 50 percent market share of new Mercedes-Benz. It has also registered sales of some 360 of Mercedes-Benz cars in the first three months compared with the 250 units sold in the same period last year. To boost sales the group is also planning to conduct a number of launches that are mainly due for next year like the Mazda BT50 pickup truck and the newly face lifted Mazda 5 and RX8.
