Mercedes-Benz to invest RM200m in retail network

Monday, Dec 21, 2015

Mercedes-Benz Malaysia will be looking to invest a further RM200 million until end-2016 to enhance its retail network to deepen the group’s presence nationwide, as Malaysia currently represents the biggest market for Mercedes-Benz passenger cars in Southeast Asia, according to the company.

The German automaker has invested over RM250 million here since 2012, and has been reaping the benefits of its investment as market development for its brand has grown significantly. Its annual passenger car sales grew from 5,809 units in 2012 to 6,932 units in 2014 — a record annual number for the company.

As at early October this year, its passenger vehicle sales hit about 8,200 units, exceeding the total volume for 2014, and setting 2015 up as another record-breaking year in terms of sales.

Its year-to-early-October sales were 70% higher over the same period last year, president and chief executive officer Dr Claus Weidner told The Edge Financial Daily in an interview recently.

However, he was cautiously optimistic about going into 2016, given the rising cost of living and continued weakening of the ringgit against the US dollar.

“To repeat that sort of growth ... we can’t do [it] every year. Nevertheless, we are confident we can keep up with the expected high level of sales in 2016, and will look into the macroeconomic situation and plan accordingly,” Weidner said.

He declined to disclose if the group will raise prices of its cars next year, saying that it is too early to tell if the group should.

“We have several financial instruments in place, together with our group from Daimler. But at the current stage, I cannot say which way we will take,” Weidner explained.

He added that the group’s investment in local production since 2012 will help counterbalance the carmaker’s exposure to foreign exchange to a certain extent.

Together with its authorised dealer, Hap Seng Star Sdn Bhd, Mercedes-Benz Malaysia recently launched the seventh Autohaus, or Mercedes-Benz showroom, in Kota Kinabalu, Sabah.

Known as Hap Seng Star Kota Kinabalu Autohaus, the showroom saw Hap Seng putting in an investment of RM2 million. The sum is part of the RM30 million that the dealer has put aside for its long-term expansion in East Malaysia, which includes an Autohaus in Miri, Sarawak, that opened in May, and a new one in Kuching, Sarawak, slated for launch by end-2016.

Hap Seng’s latest venture in East Malaysia will help grow Mercedes-Benz Malaysia’s customer base in the premium automotive segment. Mercedes-Benz Malaysia believes that a focused partner in the auto industry is what will help drive growth.

“In this situation, we have good progress in terms of putting in good landmarks and strategic points for the main market in East Malaysia. We want to provide the same standard of service as we do in Peninsular [Malaysia] to our customers here.

“Hence, having partners who are very focused on the automotive business and show their professionalism is crucial for us to expand because it is a really detailed set-up and we have to establish quite a lot of processes,” Weidner explained.

He added that Mercedes-Benz Malaysia had been investing in its processes and talent, in addition to the hardware aspects of the business.

“Our customers are very demanding, and this is one of the challenges that we face, and we train our front-liners to be able to cater to these customers and continuously improve our processes. Training and upgrading — these are where we invest in heavily,” Weidner said.

Mercedes-Benz Malaysia and Hap Seng began their collaboration some 46 years ago in Sabah, where they started their commercial vehicle operations in East Malaysia.

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