MENU

A Quick Overview Of Jardine Cycle & Carriage Ltd’s Business – Direct Motor

Jardine Cycle & Carriage Ltd (SGX: C07) or Jardine C&C is one of the companies related to the web of Jardines companies that include Jardine Strategic Holdings Limited (SGX: J37), Hongkong Land Holdings Limited (SGX: H78), Dairy Farm International Holdings Ltd (SGX: D01), Mandarin Oriental Limited (SGX: M04) and Jardine Matheson Holdings Limited (SGX: J336).

On its own, JCC is a conglomerate, with segments such as automotive, financial services, heavy equipment and mining, agribusiness, information technology, and infrastructure, logistics and others.  These businesses are grouped into 3 segments, namely Astra International, Direct Motor, and Others.

Given the complexity of this business, it may be useful to take a separate look at each of the three segments.

In this article, we will do a quick review of the Direct Motor FY17 first half business performance.

Source: Q2 FY17 result presentation

The above is a quick overview of the motor businesses across five countries. Here, we will try to understand the performance in the four main countries.

Vietnam – The weaker profit was due to a decline in overall sales units by 8% to 47.2k units. Moreover, competitive pressures, following the reduction of import tariffs that resulted in a decline in margins also contributed to the weaker performance.

Singapore – The Group’s Singapore motor operations saw earnings grow 11% to US$24.1 million, due to a 21% increase in passenger car sales to 7,300 units, together with improved contributions from used cars and parts. The Group’s passenger car market share saw an improvement from 14% to 16%.

Malaysia – The weaker performance in Malaysia’s business was “due to a 13% reduction in unit sales and margin pressures from strong competition within the Mercedes-Benz network and in the premium car market, in particular BMW.”

Indonesia – In Indonesia, the weaker performance was due to lower profits from its motor vehicles and finance activities, partly offset by stronger contributions from the motorcycle and rental businesses.

Motor car sales were 8% higher at 27, 100 units, while motorcycle sales were up 5% at 105, 800 units.

Conclusion:

As a whole, with the exception of Singapore, all other countries faced margin challenges. On the flip side, vehicles sales volume remained relatively positive in Singapore and Indonesia.

If you like what you've seen, you can get even more investing insights and analyses from The Motley Fool's weekly investing newsletter Take Stock Singapore. It's FREE, so do check it out here.

Also, like us on Facebook to follow our latest news and articles. The Motley Fool's purpose is to help the world invest, better.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.The Motley Fool Singapore has recommended shares of Dairy Farm International and Hongkong Land. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.