Cycle Carriage is one of the Malaysia's largest dealers for Mercedes-Benz vehicles in which mass promotions and advertisements can be seen on newspaper daily. Although there are many dealers out there, we believe that Cycle Carriage is able to leverage on its purchasing ability and providing the best prices and services altogether and in turn generate increasing revenue. However, there are more emerging luxury vehicle brand which are competing for their respective market shares in Malaysia which threaten Cycle Carriage's position.

In order to stand their way out, fierce marketing campaigns are held which increase their distribution cost in recent years. In a worse scenario, the company may need to hold more promotions in years of crises and push their margin further down. For luxury goods, the cost of sales alone is consuming high portion of the revenue already. Therefore, not much profitability can be expected. Also, recent announcement of government's NAP policy has confirmed that prices of overseas automobile will gradually decrease for 30% in 5 years which will cause the consumers to adapt wait and see approach where in short term, revenues for the dealer may decrease.
According to the free cash flow, the company's performance has been deteriorating throughout these ten years. Furthermore, ROA and ROE has not appeared to be satisfactory which reflects the company low efficiency. Therefore, there is lack of potential for the company to generate stable growth in the future. Talking about dealership, will Cycle Carriage strive its way up in terms of cost management and less capital expenditure? I am looking forward to it.