UMW Toyota Records Lower Year-to-Date Revenue Compared to Last Year – Report

Kuala Lumpur:  UMW Toyota is facing a lot of challenges since the beginning of 2015. Earlier, this year, the authorised distributor of Toyota vehicles in Malaysia lost it's coveted number one position in the non-national automotive segment and now it has recorded the lower year-to-date revenue - RM2.60 billion in 2015 compared to RM2.64 billion by end of Q3 in 2014, says The Star report.

According to UMW Holdings, a fall in revenue is mainly due to tough competition from other automakers in the market and the weak consumer sentiments. The weakening ringgit is also a major factor behind the lower year-to-date revenue as it caused a significant increase in the campaign and promotion expenses. The situation has become worse since the UMW Toyota Motor Sdn Bhd has declared that a price hike across the entire model range of Toyota and Lexus cars. Beginning January 2016.

An analyst from a Bank-supported brokerage says that the weakening position of Ringgit will badly affect UMW Holdings Bhd and Tang Chong Motors Bhd in 2016 because both of them have rather high-denominated US dollar costs, mainly due to the import of CBU vehicles, CKD kits and other vehicle parts and components that cut down margins. On the other hand, analysts are very optimistic on the prospects of Berjaya Auto Bhd – the official distributor of Mazda vehicles in Malaysia. While addressing a press conference at the official launch of all new Mazda CX3, Berjaya Auto’s CEO, Datuk Seri Ben Yeoh denied any price hike in future as they trade in Yen, which is pretty stable compared to Ringgit. Also, the monetary measures implemented by the Bank of Japan has helped the company to stay soft. At the same time, Proton has announced a price hike starting January 2016. Honda Motors has announced a 2-3% price hike on their cars next year compared to Toyota Motor's 4-16%.

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