APM Automotive Holdings Berhad provides and delivers original automotive parts for the procedure of piecing new vehicles use every bit good as insistent replacement parts. The company ‘s merchandises are classified into three chief allocations viz. interior and plastics, suspension and electrical and heat exchange allocation. The inside and plastics allotment includes automotive seats, plastic parts, organic structure side castings, interior trims and door panels. Meanwhile, suspension allocation includes leaf springs, daze absorbers, spiral springs, metal parts and gas springs. Finally, electrical and heat exchange allocation includes starter motors, alternators, wiper systems, distributers, engine direction systems, air-conditioning systems, capacitors, evaporators, compressors and radiators. These merchandises are traded and exported to more than 40 states worldwide.
Profile and Background
Company Background
APM Automotive Holdings Berhad has a corporate doctrine of “ endeavoring to be a universe category automotive constituent maker in footings of quality, cost and bringing and in doing client satisfaction our highest precedence ” . The company holds on this strong and powerful doctrine to run its concern, spread outing markets, constructing repute and accomplish the success of the company.
Besides, a successful concern besides based on its ain short and long term vision and mission. APM launched its new corporate logo along with its 35th anniversary jubilation in twelvemonth 2009. The new logo has a distinct contrary white APM within a ruddy ellipse that stand foring the universe. APM trade names of automotive parts maker was aimed to do a bigger coverage in the regional country and besides set the scene for planetary trade name acknowledgment and repute.
On the other manus, APM ‘s end has ever been clear and straightforward which is to be a competitory regional automotive constituents maker in the short or midterm and a planetary provider in the long term. APM proves itself by turning from little Malaysian-centric automotive constituents maker, to go a regional and planetary provider.
Company History and Achievement
The followers is the brief company history and accomplishment in timeline series:
1978 – Car Parts Manufacturers Co. Sdn. Bhd. ( APM-Co ) was established to bring forth
leaf springs, daze absorbers, seats & A ; radiators.
1980 – Official Opening of APM-Co works by Dato ‘ Seri Dr. Mahathir Mohamad, so the
Deputy Prime Minister of Malaysia.
1983-85 – More parts fabricating companies were launched.
1988 – Car Partss Manufacturing Group turnover topped RM100 million.
1992-93 – All car parts fabricating companies assumed “ APM ” individuality.
1994 – Established first abroad joint venture in China.
1997 – Annual turnover topped RM500 million.
1999 – APM Automotive Holdings Berhad was listed on the Main Board of Kuala
Lumpur Stock Exchange ( KLSE )
2001 – APM achieved QS 9000 quality direction system enfranchisement.
Honored with Ford ‘s 2000 World Excellence Award for Quality & A ; Delivery.
2002 – Installation of 2nd Automated Robotic Parabolic Line.
Official subscribing ceremonial of P.T. APM Armada Autoparts mill in Magelang,
Indonesia.
Official subscribing ceremonial of joint venture understanding with Hefei Winking Asset
Co. Ltd. ChinaA
Official opening ceremonial of Fuji Seats ( Malaysia ) Sdn Bhd mill in Bukit
Beruntung, Selangor.
2004 – All fabricating subordinate companies achieved ISO 14001 enfranchisement from
TUV.
APM secure contract to provide leaf springs & A ; constituents to GM Holden,
Australia.
2005 – Established new spring fabrication works in Vietnam.
Construction of new distribution Centre in Tanjung Malim, operations to get down
foremost one-fourth 2006.
All fabricating subordinates achieved TS 16949 certified by 2006.
2008 – APM Shock Absorbers awarded the esteemed “ Brandlaureate Award ” for The
Best Brand – Fabrication of Shock Absorbers.
Factors or policy that affects the company
“ 2009 proved to be an unprecedented twelvemonth for the planetary automotive industry with car gross revenues badly affected by the worst planetary fiscal crisis that has devastated a bulk of the universe ‘s economic systems and saw vehicle production dropped to the lowest degree in decennaries, ” stated by Dato ‘ Tan Heng Chew, president of APM Automotive Holdings.
The automotive industry in Malaysia was non spared. However, the downswing in entire industry production ( TIP ) in Malaya for the first six months was low but fleetly recovered in the 3rd one-fourth with farther betterment in the last one-fourth of the twelvemonth. As a whole, harmonizing to Malaysian Automotive Association, TIP volume merely dropped by 7.8 % from 530,810 units to 489,269 units compared with the old twelvemonth. Despite the challenges, the Group ‘s grosss dropped by a mere 2.6 % from RM943.5 million recorded last twelvemonth to RM918.5 million.
Based on the one-year study of APM Automotive Holdings, the group had highly good consequences for the fiscal twelvemonth ended 31 December 2009 because the Group ‘s best of all time pre-tax net income of RM100.6 million, exceling RM100 million for the first clip of all time.
APM Automotive Holdings are chiefly serves the local Original Equipment Market ( OEM ) and Replacement Equipment Market ( REM ) which made up 68 % and 11 % of gross severally. In Malaysia, APM ‘s operations which accounted for 88 % of the entire gross revenues, recorded a high gross than the old twelvemonth and pre-tax net income improved by 5.7 % from RM86.3 million to RM91.2 million. This is due to the ground that the operations of this Group in Malaysia provide a broad scope of automotive constituents for usage in the industry of new vehicles ( OEM ) , every bit good as for usage as replacing parts. In order to better APM ‘s aftermarket gross revenues which is besides called as REM, the Group conducted some proficient preparation classs for workshop technicians in the assortment parts of the states aiming to develop the value of APM trade name and at the same clip enlarging the Group ‘s distribution web due to the ground that gross revenues for the aftermarket which accounted for 13 % of the entire gross fell marginally by 0.2 % during the twelvemonth.
In add-on, APM Automotive Holdings besides applies export sector in order to spread out the Group ‘s distribution web. This can be proven that APM ‘s merchandises are exported to more than 40 states and the figure of the exported merchandises is expected to lift in the coming old ages. Export markets and abroad concern jointly accounted for the balance 20 % . APM exports replacing parts to traders in Asia ( 35 % ) , Europe ( 30 % ) , Australia ( 13 % ) and United States ( 12 % ) .
Besides that, APM ‘s growing lies in installation enlargement. Over the longer term, APM ‘s growing will bring forth from abroad markets in Vietnam, Indonesia, and Thailand. To increase the Group ‘s merchandise scope, APM has late expanded its works installation in Vietnam. APM ‘s bing works located at the Vietnam-Singapore Industrial Park presently produces leaf springs for the local market. The map of the new works which is located beside their existing works site will roll up daze absorbers, siting and air-conditioners. The works will ab initio supply to the local OEM market. The budgeted capex for this works is estimated to be about US $ 10m ( RM32m ) and is expected to be to the full operational by the 4th one-fourth of 2010. The gap of the works in Vietnam will convey more opportunities for APM to spread out its client base due to the ground Vietnam already has 17 automotive makers like Ford, Toyota and Honda runing at that place. Furthermore, APM will be capable to accomplish at least a 10 % return on investing from this works. As for their Indonesian opposite numbers, APM is besides looking at more land to add to the three bing workss that they have in Jakarta which presently produces spiral springs, siting and interior parts.
There are some factors which will impact a company ‘s export sector. Out of the many factors, war is the chief cause that brings immense impact to the APM Automotive Holdings. For case, ruddy shirt ground forces issue greatly influenced many facets in Thailand such as a batch of industry and industry sectors being bombed and destroyed. This straight caused the export of APM Automotive Holdings in Thailand being greatly reduced which caused the immense loss of the Group ‘s gross.
The 2nd factor is the unexpected issue which is natural catastrophe. In the twelvemonth of 2010, the serious haze job which occurred in some of the Europe states besides straight caused the disfunction of export in the peculiar states. This is because the exportation through the waterway and air lane conveyance will be blocked by the serious haze. Therefore, APM Automotive Holdings will temporarily halt all the export of their car constituents to the peculiar Europe states due to the haze issue. This job will greatly do a large loss of the net income to APM Group.
On top of that, the 3rd factor that will hold impact to the company is the foreign currency exchange rate issue. As we know, currency exchange rate is volatile and unstable every 2nd. Due to this job, this will do APM explore in hazard of deriving a lesser gross. However, to avoid the hazard in fluctuate of currency exchange rate, APM Automotive uses frontward exchange contracts to fudge its currency exposure. Most of the contracts have adulthoods of less than one twelvemonth. As at 2010, they hold RM64.4million of forward exchange contracts or about 10-15 % of the APM Automotive ‘s one-year currency exposure. The contracts will be rolled over at adulthood if necessary. They besides conducts one-year monetary value alteration with its clients whereby any addition in cost of gross revenues will be partially absorbed by their clients and likewise any lessening in cost of gross revenues would be enjoyed by its clients.
APM Automotive Holdings is considered as a cash-rich company which enjoys an of import advantage over their less fortunate rivals in these diffident economic times. In a recession, hard currency is king, or so the expression goes, but the fact is money entirely outputs paltry returns at current salvaging rates. Therefore, holding tonss of hard currency in the pool gives the Group the flexibleness to squat down when concern is slow and catch a trade when an chance arises. In concurrence with this statement, it is proven that half of APM Automotive Holdings ‘ current market values are sustained by hard currency as the recorded net hard currency place of the Group is RM180 million. Due to this factor, this caused the bing stockholders to hold more assurance into APM Automotive Holdings because the Group has sufficient hard currency on manus to pay out dividends to the stockholders during the economic system crisis such as recession and rising prices. In add-on, this ground will besides pull more people in the populace to put in APM ‘s portions.
In 2006, APM Automotive gets two new contracts from National car manufacturer Proton Holdings Bhd and Perusahaan Otomobil National Kedua Sdn Bhd ( Perodua ) , to which APM Automotive will provide daze absorbers, spiral springs, air conditioners and other electrical parts among others ( Barrock, 2006 ) . In 2009, Perodua, Proton, Toyota, Honda, Hyundai, Mercedes and Tan Chong are the chief clients of APM Automotive which made up 51 % , 23 % and 12 % of OEM gross revenues severally. Although APM Automotive does non hold any long-run contracts with these companies, but their merchandises are developed alongside these companies at the R & A ; D phase, therefore relieving the hazard of auto makers exchanging to other providers.
APM Automotive has a strong market place in the car parts sector, being the taking participant in Malaysia with an estimated market portion of 12.6 % based on gross. They are commanding market place which their market size of the auto-parts sector in Malaysia to be RM7.5bn ( Eugene, 2008 ) . Due to this size, APM Automotive has an border over its local rivals because of the broad merchandise scope offered and an established record as a dependable provider to its clients. APM Automotive besides by and large has better economic systems of graduated table every bit good as dickering powers in auto shapers.
Since 2009, APM Automotive becomes a good placeholder to the motor sector that is presently into its 2nd twelvemonth of a new 3 -year rhythm. A closer expression at Malaysia ‘s Entire Industry Volume ( TIV ) by the Malaysian Automotive Association ( MAA ) shows that the local motor sector has been traveling in 3-year rhythms since 2000 i.e. 2000-2002, 2003-2005, 2006-2008 and potentially see this once more for 2009-2011 ( Appendix 1 ) . In this chart, TIV growing is usually seen in the 2nd and 3rd old ages of the rhythm ( Malayan Automotive Association, 2011 ) . In add-on, the replacing rhythm for motor vehicle, they believed to be 5-7 old ages, may hold accelerated.
APM Automotive gross is extremely correlated with entire TIV as the local OEM and REM contribute 79 % to entire gross. They are depends to a great extent on Perodua and Proton, which make up more than half of their OEM gross while part from Tan Chong company, is still comparatively low at 12 % .
Furthermore, APM Automotive does non hold any dividend policy but it is likely maintain a payout ratio of 25 – 35 % . For 2010-11, APM Automotive is accomplishable given the positive mentality for divided projection of 16cent and 17cent.
In 2010, APM Automotive plans to pass about RM80m on capital outgo which will be used for: 1 ) the concluding stage of the resettlement and centralization of its seating and interior installations in Bukit Beruntung ; 2 ) consolidation and centralization of its bing Seri Kembangan installations to the bing Port Klang site ; and 3 ) the building of its daze absorbers, siting and air conditioning installations in Vietnam.
Due to our research, we found out APM Automotive has 30-35 % currency exposure being the US $ followed by Yen. Approximately 15 % and 12 % of cost of gross revenues is denominated in US $ and Yen severally. Meanwhile, exports accounted for 11 % of gross, of which 4 % is denominated in US $ , 4 % in Euro while the staying 2 % in other currencies. Some fiscal experts analysis that 1 % grasp in US $ and Yen would cut down APM ‘s net incomes by 0.9 % severally.
In decision, APM Automotive Holdings is considered as the largest car constituents export company which produces three sections of merchandises: 1 ) Interior and Plastics ; 2 ) Suspension ; and 3 ) Electrical and Heat, with the inside and plastics division being the highest-margin merchandises. This company generates a batch of net incomes by exporting the car merchandises non merely in Malaysia, besides to 40 other states in the universe, and the sum of gross is expected to turn continuously in the approaching hereafter.
