A Quick Overview Of Jardine Cycle & Carriage Ltd’s Business – Direct Motor
Jardine Cycle & Carriage Ltd (SGX: C07) or Jardine C&C is one of the companies related to the web of Jardines companies that include Jardine Strategic Holdings Limited (SGX: J37), Hongkong Land Holdings Limited (SGX: H78), Dairy Farm International Holdings Ltd (SGX: D01), Mandarin Oriental Limited (SGX: M04) and Jardine Matheson Holdings Limited (SGX: J336).
On its own, JCC is a conglomerate, with segments such as automotive, financial services, heavy equipment and mining, agribusiness, information technology, and infrastructure, logistics and others. These businesses are grouped into 3 segments, namely Astra International, Direct Motor, and Others.
Given the complexity of this business, it may be useful to take a separate look at each of the three segments.
In this article, we will do a quick review of the Direct Motor FY17 first half business performance.
Source: Q2 FY17 result presentation
The above is a quick overview of the motor businesses across five countries. Here, we will try to understand the performance in the four main countries.
Vietnam – The weaker profit was due to a decline in overall sales units by 8% to 47.2k units. Moreover, competitive pressures, following the reduction of import tariffs that resulted in a decline in margins also contributed to the weaker performance.
Singapore – The Group’s Singapore motor operations saw earnings grow 11% to US$24.1 million, due to a 21% increase in passenger car sales to 7,300 units, together with improved contributions from used cars and parts. The Group’s passenger car market share saw an improvement from 14% to 16%.
Malaysia – The weaker performance in Malaysia’s business was “due to a 13% reduction in unit sales and margin pressures from strong competition within the Mercedes-Benz network and in the premium car market, in particular BMW.”
Indonesia – In Indonesia, the weaker performance was due to lower profits from its motor vehicles and finance activities, partly offset by stronger contributions from the motorcycle and rental businesses.
Motor car sales were 8% higher at 27, 100 units, while motorcycle sales were up 5% at 105, 800 units.
As a whole, with the exception of Singapore, all other countries faced margin challenges. On the flip side, vehicles sales volume remained relatively positive in Singapore and Indonesia.