Cycle & Carriage Bintang (CCB) has reported that it sold more Mercedes-Benz passenger vehicles in the first quarter of 2018 compared to the corresponding period last year, but compressed margins have affected its financial performance for the quarter, The Star reports.
The Mercedes-Benz dealer said its trading operations made a net loss of RM2.69 million in the first three months of the year, on a revenue of RM388.6 million. While sales rose by 21% in Q1 2018, CCB said that there was a consumer shift towards lower-end models, with the sales mix moving from the S-Class to the C-Class, GLC and E-Class, resulting in compressed margins for the company.
According to CCB chairman Haslam Preeston, the company was able to deliver better results in both retail and after sales for the period despite intense competition.
“This increase was, however, offset by higher operating expenses and financing costs. While higher sales volumes reflected early results from the group’s business improvement programme, margins remain highly compressed as a result of demand shifting to lower-priced models,” Haslam said via a statement. He added that markets are expected to remain challenging for the rest of the year.
Earlier this month, Mercedes-Benz Malaysia announced record sales for Q1 2018, where it sold 3,335 vehicles, an increase of 13.2% compared to the same period in 2017. The company also said that its sales in January and February were the best on record.
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When cars are made bigger and bigger from generation to generation, ppl don’t buy higher end models anymore.. E class as big as previous S class, C class as big as previous E class.. soon A class sedan will be as big as previous C class.. it’s happening to all other brands and all manufacturer have no choice but to create new lower end models as their previous lower end models have just got bigger..
More Mercs sold yet still making a loss. Prices increase inevitable…
This must be another joke by CCB. Total sales increase by by 21% in Q1 2018 but operations made a net loss of RM2.69 million in the 1st 3 months.
Looks like they may increase the price of A/B/C/E class in future to mitigate further losses bcos CCB chairman Haslam Preeston said there was a consumer shift towards lower-end models(A/B/C-class).
Cheap models and pre-registered cars are killing the margin.
Sell 21% more car but making losses. Should look tighter on the expenses.
When luxury cars are built better (shockingly true), with more emphasis on reliability and economy of maintenance rather than having the latest toys that may not provide long term satisfaction then perhaps profitability will follow. As it stands, the business model luxury car makers may not be sustainable in this era of automobiles. With declining sales to new graduates, longer cycles of car retention, the car makers are at odds with the needs of the buyers.
Simply hoping to retain existing buyers with the next generation of giving more is not logical when families are getting smaller.
Makes you u wonder how is BMW Malaysia and it’s dealers making money when there’s 5 year warranty and free service with 2 year tyre warranty.
People buy high end and new BMW, when come to Mercedes people buy cheaper model and pre-owned car.