The Board is recommending a final dividend of 10 sen per share

Against a backdrop of war in Iraq and the outbreak of SARS, the
Malaysian economy remained robust and grew at 5.2% in 2003.
The vehicle industry however slipped back over the previous year
mainly as a result of uncertainty regarding car prices after
expected duty changes in January 2004 and the extent to which
liberalisation under AFTA would change pricing dynamics.
The automotive market declined by 6.9% to 405,000 units in
2003. However, within the total figure were some surprising
movements. The national car sales volume declined by 17%, with
Proton being worst hit. The non-national brands sales soared by
54% to 48,137 units as low cost Korean and Japanese models
filled a price gap ever closer to the national car price segment.
This, along with attractive financing plans, allowed the consumers
a wider choice of vehicle.
Mercedes-Benz
2003 saw the first successful year of operation of DaimlerChrysler
Malaysia (“DCM”), the new wholesale and distribution company
for Mercedes-Benz in Malaysia in which the Group holds a 49%
shareholding, albeit with limited rights. Cycle & Carriage Bintang
Berhad assumed its role as the largest retailer of Mercedes-Benz
vehicles through 5 newly established dealerships. Full year retail
sales of 1,370 units represented a solid performance in a difficult
market. However competition from other luxury makes and
the parallel importers put margins under pressure in the second
half of the year. The Company ended the year with a healthy
stock position.
Managing Director’s Review
Commercial vehicle sales were affected by a lack of new product
in the early part of the year. Despite this however, an overhang of
bus chassis from 2002 resulted in a sales volume of 183 units.
Stock has now been reduced to normal levels.
After sales performance was satisfactory with labour and parts
margins ahead of budget. The focus in 2004 is to improve levels
of customer service and relationship management, both of which
will contribute to long term growth in earnings.
A refurbishment programme for the Mercedes-Benz retail facilities
in line with global standards commenced during the year with
Ipoh Motors redevelopment completed in early 2004. Further
investment in the remainder of the Company’s dealerships will
be made during 2004 and 2005 to reach the standards set out
by DCM.
The focus in 2004 is to continue to strengthen the management
skills and customer service levels across the Mercedes-Benz
dealership operations whilst developing world class facilities
from which to continue to grow sales revenues.
22
Cycle & Carriage Bintang Berhad
Annual Report 2003