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.