Tan Chong International profits fall by 86.6% in 1H 2024 due to “severe drop” in Subaru sales

Tan Chong International profits fall by 86.6% in 1H 2024 due to “severe drop” in Subaru sales

Singapore- and Hong Kong-based Tan Chong International (TCIL) appears to be in dire straits at the moment – the group, which owns Asia’s major Subaru distributor Motor Image, reported a whopping 86.6% drop in profits in the first half of 2024 due to problems with its automotive business.

In a profit warning released to investors on Monday, the company said its profits after tax fell to HK$25 million (RM15 million), compared to HK$187 million (RM112.6 million) in the same period last year. This has been attributed to a “severe drop in sales,” with significant losses in its CKD markets Malaysia and Thailand and CBU markets Taiwan, Singapore (where TCIL is also a Nissan distributor) and Philippines.

The only bright spots were its Singaporean and Japanese subsidiaries, automotive and finance services provider Ethoz Group and logistics company Zero respectively, both of which reported some growth in the first six months of the year.

Tan Chong International profits fall by 86.6% in 1H 2024 due to “severe drop” in Subaru sales

TCIL and Subaru are set to cease CKD local assembly next year

Despite the “very challenging circumstances,” TCIL said its overall financial health and operational readiness remain “stable and robust.” It also expects to bounce back in the second half of the year, judging from the “relatively strong” number of bookings in its automotive division.

The severe shortfall in sales may have played a part in Subaru’s decision to pull out of completely knocked down (CKD) local assembly operations in Southeast Asia, including not just in Malaysia and Thailand but also in Vietnam and Cambodia. These markets will transition to a completely built up (CBU) model starting next year, with cars being imported from Japan.

Subaru has been assembling vehicles in Malaysia at the Tan Chong Motor Assemblies (TCMA, a subsidiary of Tan Chong Motor Holdings) plant in Segambut since late 2012, building the XV; the Forester, previously also a CKD model, is already a CBU import. The move to cease local assembly will likely have a significant impact in sales, as prices are expected to go up in these markets, further straining TCIL’s bottom line.

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Jonathan Lee

After trying to pursue a career in product design, Jonathan Lee decided to make the sideways jump into the world of car journalism instead. He therefore appreciates the aesthetic appeal of a car, but for him, the driving experience is still second to none.

 

Comments

  • Diam-ler on Jul 10, 2024 at 11:52 am

    Subaru XV owner here. Ya la what to expect, all cut throat after-sales especially Karuz Glenmarie. The one in Setia Alam is very very good. Seriously, what’s up with Tan Chong these days? Family fighting? Too many baby boomer people there? Subaru cars are really cutting edge like Porsches, shame about the distributor

    Like or Dislike: Thumb up 32 Thumb down 0
    • Jurassic park 2024..starring Tan Chong & Sons on Jul 10, 2024 at 1:44 pm

      It is an irony…nephew Anthony Tan became super rich due to Grab.
      Tan Chong is as old as Merdeka.
      Mazda under Datuk Ben has overtaken them.
      What’s wrong with them?
      Answer: Jurassic style of management,keep on exploiting staff and customers.
      Better let Datuk Ben take over,Nissan Japan.

      Like or Dislike: Thumb up 2 Thumb down 0
    • Dah Menang Semua on Jul 10, 2024 at 2:14 pm

      Nothing wrong with Subaru
      It shall be unique as Mazda
      Anything TC touches just died
      The glory era of Nissan Sunny
      Has been long-gone now but sunset

      Like or Dislike: Thumb up 2 Thumb down 0
  • DonkeyKong on Jul 10, 2024 at 12:02 pm

    Tan Chong is being run to the ground by the incompetent and entitled next-generation. Just ask any former Tan Chong employee and they can tell you how “chinaman” this corner-cutting employee-exploiting company is. Serves them right that they’re gonna go under soon. I just pity the Subaru brand. Good products under a terrible regional partner. Hopefully Subaru secures a new partner after Tan Chong folds, and please let it not be Berjaya because they’ll end up gaslighting us that an XV is a premium vehicle and price it at RM200k.

    Like or Dislike: Thumb up 40 Thumb down 4
    • yawnz on Jul 10, 2024 at 3:12 pm

      Basically any Chinamen company here xboleh pakai lar whether be TanChong or Berjaya. Better luck with UMW, just maybe.

      Like or Dislike: Thumb up 1 Thumb down 0
  • Kea Was on Jul 10, 2024 at 12:45 pm

    Well guess he deserve it another guy who supports the AP in corny Malaysia.

    Like or Dislike: Thumb up 15 Thumb down 0
  • Ben Yap on Jul 10, 2024 at 1:39 pm

    Hahahaha… anything under Tan Chong, the brand will doom to fail. TCI = Totally Crash Irrefutably.

    Like or Dislike: Thumb up 1 Thumb down 0
  • Padan muka. Model baru mcm Crosstrek x nak jual, sibuk dgn produk lama, XV. Harga pulak mahal. Tak nak sentuh psl service lg nih.

    Like or Dislike: Thumb up 1 Thumb down 0
  • subatu on Jul 10, 2024 at 2:09 pm

    If Tan Chong folds, maybe Sime Darby can take up the mantle. They owns UMW now so that is excellent positioning for Subaru and Toyota since both brands also essentially under the same company in Japan. Their aftersales effort is not half baked. It would be sad if they withdraw.

    Like or Dislike: Thumb up 0 Thumb down 0
  • Hans Faasse on Jul 10, 2024 at 3:16 pm

    Got 2 Subaru’s. Thai assembled. Bearings, front wheel arms. Lousy parts. Overpriced spare parts. Driving performance is, when all in order, however, 2d to none. Just waiting for japanese made one.

    Like or Dislike: Thumb up 1 Thumb down 0
  • Subaru Owner on Jul 10, 2024 at 3:24 pm

    How to make profit, if still selling all the outdated Subaru cars? You see what happen to Nissan now. Better give up the distributorship and let other well deserve company.

    Like or Dislike: Thumb up 2 Thumb down 0
 

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