CORPORATE PROFILE

The Group is principally involved in the distribution and retailing of Mazda vehicles as well as provision of after-sales services for Mazda vehicles in Malaysia via Bermaz Motor Sdn Bhd and Bermaz Motor Trading Sdn Bhd (collectively “Bermaz”). In the Philippines, the distribution of Mazda vehicles and spare parts is undertaken by Berjaya Auto Philippines Inc (“BAP”) through appointed dealers.

Bermaz Motor Sdn Bhd commenced operations on 1 April 2008 after it entered into a Distribution Agreement with Mazda Motor Corporation (“Mazda Japan”) on 28 February 2008 and was awarded the distributorship of specific models of Mazda CBU (“Completely Built-Up”) vehicles, spare parts, accessories and tools in Malaysia.

As at 31 July 2014, Bermaz has 4 branches in Malaysia, all of which are 3S (“sales, spare parts and after-sales services”) centres and 70 dealers nationwide.

BAP commenced operations on 2 January 2013. As at 31 July 2014, it has 14 appointed dealers, all of which are 3S centres. Mazda Malaysia Sdn Bhd (“MMSB”) is a 30%- associated company of Bermaz Motor Sdn Bhd, with the remaining 70% equity interest held by Mazda Japan. MMSB is principally involved in the local assembly of Mazda vehicles by a third party contract assembler using local parts and imported Mazda supplied parts.

Berjaya Auto Berhad (“BAuto”) was incorporated in Malaysia on 11 May 2010 as a private limited company under the name Fiscal Start Sdn Bhd. It assumed the name Berjaya Auto Sdn Bhd on 14 February 2011 and was subsequently converted into a public company on 11 July 2011. BAuto was listed on the Main Market of Bursa Malaysia Securities Berhad on 18 November 2013.

MAZDA OPERATIONS IN MALAYSIA

Bermaz Motor Sdn Bhd and Bermaz Motor Trading Sdn Bhd (collectively “Bermaz”) is primarily engaged in the distribution and retailing of new and used Mazda vehicles and the provision of after-sales services in Malaysia.

Through its associate company, Mazda Malaysia Sdn Bhd (“MMSB”), Bermaz is also involved in the assembly of Mazda CKD (“Completely Knocked-Down”) vehicles for distribution in the domestic market and export to Thailand.

Except for the Mazda3 1.6L and CX-5 2.0L models which are locally assembled or CKD models, all other models distributed in Malaysia are CBU (“Completely Built-Up”) models imported from either Japan or Thailand. As at the financial year ended 30 April 2014, Bermaz operates four 3S (“sales, spare parts and after-sales services”) centres and has 70 third party appointed dealers nationwide, of which 31 are 1S (“sales”) centres, 14 are 2S (“spare parts and after-sales services”) centres and 25 are 3S centres.

The total industry volume (“TIV”) for year-to-date (“YTD”) June 2014 was 333,142 units which was in increase of 6.3% compared to last year’s YTD June 2013 at 313,488 units. The TIV growth was primarily due to the country’s steady pace of economic growth, positive consumer sentiments as a result of a stable employment market and car distributors introducing many new models with attractive specifications, designs and pricing. Despite facing stiff competition, Bermaz continued to register an increase in its market share.

For the financial year under review, Bermaz recorded revenue of RM1.27 billion which represented a 25.7% improvement over the RM1.01 billion revenue registered in the previous financial year. The higher revenue was largely due to an increase in motor vehicle sales volume from 8,142 units in the previous financial year to 9,497 units for the financial year under review as a result of good demand for the CX-5 and new Mazda6 models.

In line with the higher revenue and on the back of a healthy gross profit margin that was mainly  attributed to favourable exchange rates, product cost improvement and better sales mix, Bermaz’s pre-tax profit increased 131.6% from RM68.1 million in the previous financial year to RM157.7 million in the financial year under review.

Mazda has now grown to be a recognisable car brand in Malaysia since Bermaz took over the distributorship in 2008 as evidenced by the increase of sales volume in the past few financial years. To support the increasing sales volume of Mazda vehicles and the units in operation, Bermaz will continue to expand its after-sales service network coverage and establish new programmes to support the improvement of Mazda’s customer satisfaction index. To maintain and improve the standard of after-sales services, Bermaz continuously emphasises on human resource development by having in-house training programmes in collaboration with external professional industrial institutes.

On the local assembly of Mazda CKD vehicles, a long term sustainability programme for domestic automotive activities is being undertaken by MMSB, a joint venture company with Mazda Motor Corporation (“Mazda Japan”). A local vendor development programme is in place to increase local cost content to meet AFTA (ASEAN Free Trade Area) requirements for export activities. MMSB will continue to increase its CKD programmes for domestic and ASEAN markets as it is one of the ways to drive cost down and contribute towards the local automotive industry. Investment in manufacturing facilities and equipment are being carried out by MMSB to increase production capacity and improve quality. MMSB’s CKD operation is very critical to Bermaz as the level of localization would influence price competitiveness and profit margin.

The outlook for Bermaz is promising as its partnership with Mazda Japan has grown stronger over the years. Mazda is well-known for its strong branding image, appealing car designs and new innovative technology. The present SKYACTIV Technology is well-recognised for its engine performance, safety features and fuel economy. Bermaz has plans to introduce four new car models in financial year 2015 and 2016 in order to achieve a sustainable growth rate.

MAZDA OPERATIONS IN THE PHILIPPINES

Berjaya Auto Philippines Inc (“BAP”) is principally involved in the distribution of Mazda vehicles and spare parts through appointed dealers in the Philippines. As at the financial year ended 30 April 2014, BAP has 14 appointed dealers, all of which are 3S centres.

The Philippines’ automotive industry has grown for the past 5 years at an average of 10% per annum. In 2013, the automotive industry grew by 15% compared to 2012, driven by new model introductions and emerging new segments in the market. The current sales pace of the automotive industry in 2014 is estimated to reach 250,000 vehicles, representing an increase of 11% over last year.

For the financial year ended 30 April 2014, BAP’s revenue increased 218.9% to Php2.395 billion compared to Php751 million recorded in the previous financial year. The higher revenue was mainly due to increase in motor vehicle sales volume from 659 units in the previous financial year to 2,283 units for the financial year under review.

BAP began distributing Mazda vehicles in February 2013 and only experienced 3 months of sales for the previous financial year. In line with higher revenue, profit before tax increased substantially from Php55.62 million in the previous financial year to Php164.12 million for the financial year under review.

With increasing interest in the market for fuel efficient vehicles, Mazda is positioned well with its line of cars equipped with SKYACTIV Technology and BAP expects to benefit from additional models due for launch soon.

These developments will ensure that BAP enjoys a healthy sales volume growth for the financial year ending April 2015.

Annual report 2014

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