Sime Darby Sees Continued Automotive Demand Growth, Minimal Impact From Targeted Fuel Subsidy

PETALING JAYA, Aug 27 (Bernama) -- Sime Darby Bhd anticipates a continued recovery of demand in the automotive sector, with minimal impact from the implementation of targeted fuel subsidy.

Group chief financial officer Muhammad Noor Abd Aziz said that while there have been some market reactions, the group plans to adopt a wait-and-see approach.

He said that demand, particularly for high-end cars, will likely continue to recover. 

Meanwhile, group chief executive officer Datuk Jeffri Salim Davidson acknowledged that there could be an impact if the subsidy rationalisation for RON95 is introduced, but automotive sales would eventually return to the normal equilibrium. 

“We do not expect (the impact of subsidy rationalisation) to prolong. When fuel subsidy (is implemented), my view is that there will be an impact.

“Then, equilibrium will set in. So, I think there may be a shorter impact,” he told reporters at a media briefing on Sime Darby’s performance for its financial year ended June 30, 2024.

As for the electric vehicle (EV) adoption rate, Jeffri said Malaysia is showing an impressive adoption rate compared to its regional peers.

He said that while Singapore has experienced a rapid turnaround in EV adoption and Hong Kong is progressing at a slower pace, Malaysia has achieved a notable 25 per cent adoption rate within its portfolio.

“This robust uptake is supported by a diverse range of EV models available in the Malaysian market, including offerings from UMW Motors, Perodua, and Toyota,” he said.

When asked about future targets for increasing EV sales, Jeffri emphasised a customer-centric approach.

“We will sell whatever our customers want. So, if you want an EV, we will have an EV model,” he said.

Jeffri said Sime Darby is re-evaluating its strategy following a significant profit decline attributed to its operations in China.

He said the company has undertaken a comprehensive review of its Chinese operations, which include brands such as BMW, Volvo, Smart, and Kia.

In response to the challenges, Sime Darby plans to shut down several underperforming branches.

“We have already made a provision for these closures, anticipating associated costs in the short term,” he said.

-- BERNAMA