KUALA LUMPUR (Feb 5): Tan Chong Motor Holdings Bhd's indirect wholly owned subsidiary TC Services Vietnam Co Ltd (TCSV) has been appointed as the agent for importing, distributing and selling vehicles and spare parts, as well as providing after-sales services for fuel vehicles in Vietnam on behalf of Chinese car manufacturer Guangzhou Automobile Group Co Ltd (GAC Group).

In a bourse filing on Monday, Tan Chong Motor said that TCSV had entered into an agreement of distribution and service with GAC Motor International Co Ltd on Feb 2, 2024.

TCSV is authorised to engage in the retail distribution of various automobiles, the provision of automotive maintenance and repair, and spare parts services in accordance with Vietnamese laws.

Meanwhile, GAC Motor, headquartered in Hong Kong, is a subsidiary of GAC International Co Ltd, which in turn is a subsidiary of GAC Group.

Guangzhou-based GAC Motor is a state-owned holding company listed on the Shanghai and Hong Kong stock exchanges. It is primarily engaged in the research, development, manufacture and sale of vehicles and motorcycles, along with providing commercial and financial services in mainland China.

Under the terms of agreement, GAC Motor grants TCSV the rights to import, distribute and sell vehicles and spare parts, provide after-sales services, and appoint sub-distributors in Vietnam for a three-year term, commencing from the date of execution of the agreement by both parties.

The agreement may be renewed by either party by serving written notice at least three months prior to the expiry.

While the agreement is not expected to have any material effect on Tan Chong Motor's earnings per share or net assets per share for FY2024, it emphasised that the agreement provides the group with an opportunity to expand its foothold in the Vietnamese automotive industry.

Tan Chong Motor reported a net loss of RM50.70 million for the third quarter ended Sept 30, 2023, compared to a net profit of RM6.88 million in the same period last year. This loss was attributed to ongoing soft market sentiments due to inflationary pressures, and increased competition in local and overseas markets.

The group's revenue also declined by 10.97% to RM649.82 million, from RM729.87 million in the same period.

At noon break on Monday, shares in Tan Chong Motor traded flat at 98 sen, giving the group a market capitalisation of RM658.56 million.