Berjaya Corp may list automotive arm this year

PETALING JAYA: Berjaya Corp Bhd (BCorp) is believed to be looking at a possible listing of an automotive subsidiary on the Main Market of Bursa Malaysia this year.

The most well-known automotive business in the BCorp stable is Bermaz Motor Sdn Bhd, which is the official distributor of Mazda vehicles in Malaysia.

When contacted by StarBiz yesterday, a source in Bermaz Motor did not deny the possiblity of an initial public offering (IPO) this year.

The majority of the Mazda models, which range from pick-up trucks, SUVs (sport utility vehicles), performance cars, MPVs (multi-purpose vehicles) to small and large-sized family sedans, are imported from Japan.

According to the Malaysian Automotive Association (MAA), sales of Mazda passenger cars totalled 2,452 units up to May 31 this year, which was a 44% jump compared with the 1,700 cars sold in the same period last year.

Last year, a total of 4,325 Mazda vehicles were sold in the country with the Thailand-assembled 1.5-litre B-segment Mazda2 passenger car as the most popular model (42% of sales), followed by the C-segment Mazda3 (25% of sales).

In March this year, Bermaz Motor embarked on a CKD (completely knocked-down) programme for the Mazda3, which is sold in 1.6 and 2.0-litre sedan and hatchback variants.

With the local assembly programme at the Inokom plant in Kulim, Kedah, the retail prices for the Mazda3 variants, which were previously imported from Japan, were lowered to between RM99,374 and RM130,274.

The more affordable prices for the Mazda3 variants have resulted in them being the best-selling Mazda cars in Malaysia this year.

The company is aiming to sell 6,000 Mazda units this year.

Other BCorp automotive subsidiaries include Changan Berjaya Auto Sdn Bhd, Berjaya Joy Long Auto Sdn Bhd and Berjaya Brilliance Auto Sdn Bhd, which are involved in the distribution of passenger and commercial vehicles from China.

The most successful Chinese vehicle offered by Berjaya Brilliance Auto here is the Era Jinbei passenger van.

About 1,100 units of the Era Jinbei, which is assembled at the Inokom plant, have been sold since its launch in August 2009.

Changan Berjaya is planning to launch a 1.3-litre Chinese petrol-powered small-sized pick-up truck within the next few months.

The small-sized pick-up truck will be assembled by the Oriental Assemblers Sdn Bhd plant in Johor Baru.

The group is also involved in the distribution of Skoda automobiles in the country.

It should be noted that last October, BCorp was granted a manufacturing plant licence by the Ministry of International Trade and Industry for the assembly of commercial vehicles, hybrid cars, electric cars and luxury passenger vehicles in Malaysia.

However, the licence only allows the assembly or manufacture of vehicles with an engine capacity of 1.8-litre and above.

Sources in the group said BCorp was studying the feasibility of assembling Changan hybrid cars at a plant to be based in Bukit Tagar, Selangor.

Also, early last year, BCorp chairman and CEO Tan Sri Vincent Tan had signed a memorandum of understanding with Shenzhen-based BYD Auto Co Ltd to explore the possibility of building the latter's F0 1-litre right-hand drive passenger car for South-East Asian markets.

Automotive analysts contacted by StarBiz had mixed views concerning the potential listing of a BCorp automotive entity.

One analyst said a rationale of such a listing might be to raise funds for a joint venture with BYD Auto or Changan to assemble hybrid cars in Malaysia.

However, another analyst pointed out that the market size for hybrid cars was very small in Malaysia.

“Would Malaysian car buyers be able to accept Chinese hybrid cars? Also, the duty exemptions on hybrid cars below 2,000cc is given only until the end of this year, and the Government has not made known whether and for how much longer the duty exemptions will continue,” said the analyst.

Another analyst said a listing would also enable Bermaz Motor to expand its local assembly operations. “Looking at the growing sales of Mazda cars, a possible listing might make sense.”

Meanwhile, another said such a listing did not make sense as the market share for Mazda cars was very small.