News

Discovery Reports

PUBLISHED : Friday, 21 September, 2012, 4:47pm

Elaine Deng and Chan Chee Chiu

Tan Eng Hwa (left) and Fun Woh Peng, executive directors of APM Automotive Holdings

Malaysia is one of Asia's biggest markets for the automotive industry, a key sector on which the country is also actively focusing to boost its industrialisation process.

From mainly consisting of completely knocked down assembly, Malaysia's vehicle sector progressed with the help of government initiatives and programmes. These spurred increased local activities from global automotive players and the launch of two national car projects, Proton and Perodua. Such developments, in turn, catalysed the emergence of several private motor vehicle manufacturers and a host of component parts and accessories companies.

Rapidly gaining global recognition for its growing automotive expertise, Malaysia is pegged as Asia's next automotive hub following the steps of Japan, South Korea and the mainland.

Home-grown automotive parts specialist APM Automotive Holdings mirrors Malaysia's successful rise in the industry. Providing leaf springs, shock absorbers, seats and radiators since 1971, APM has become one of the pillars of the local industry. It continues to evolve alongside the country's maturity into a fully fledged automotive supply centre.

Originally established as Auto Parts Manufacturers, APM focused on manufacturing as a build-to-print company in Selangor. In sync with the changing industry landscape and market demands, the company moved from building parts based mainly on clients' drawings to developing its in-house design, engineering and testing capabilities.

"Manufacturing is not where all the growth is - it is in research and development [R&D]," says APM executive director Dr Fun Woh Peng. "Thanks to the great vision and nurturing of APM's founders, we are heading in this direction."

Listed on the Kuala Lumpur Stock Exchange since 1999, the company has undergone a series of restructuring, consolidation and expansion in the past four decades. From key component parts, its portfolio extended to comprehensive product lines classified under suspension, interior and plastic, heat exchange and electrical groups.

Recognising the potential of its high-quality products to reach a wider customer base, APM established a separate marketing division dedicated to broadening the company's local and global presence. The strategic move has driven APM to become the preferred partner of more than 1,000 stockists throughout Malaysia and the country's largest automotive parts exporter, shipping to more than 45 countries.

APM is trusted by all major car manufacturers and assemblers in its markets, including Perodua and Proton, which are Malaysia's biggest players. It is the supplier of choice of more than 30 global vehicle brands, ranging from giants such as General Motors, BMW, Toyota, Nissan and Volvo to emerging competitive players such as SsangYong and Tata.

"The vision of our founders, passion of our shareholders, dedication of our people and the entire company's constant pursuit of innovation and high quality - all these have contributed to building a solid track record for APM," says executive director Tan Eng Hwa. "Most of the cars on the road have APM parts. That speaks for itself."

From Malaysia to Asia

Aiming to replicate its local success on a regional level, APM expanded its operations to Vietnam, Indonesia and Australia, adding to its eight manufacturing sites throughout Malaysia.

"We realise that while Malaysia is a flourishing automotive market, there is a much bigger opportunity for growth overseas where we need to go and carve a niche for ourselves," Fun says. "APM needs to think in a bigger arena - and our immediate arena is Asia, particularly the Association of Southeast Asian Nations."

Catering to Vietnam's local original equipment manufacturing (OEM), replacement export market (REM) and export market, the company established APM Springs (Vietnam), which focused on manufacturing leaf springs and related parts.

APM formed three joint ventures in Indonesia. These are PT APM Armada Autoparts, PT Armada Suspension and PT Armada Johnson Controls, for the manufacture of automotive interior products, coil springs and seats respectively. Apart from being distributed to the country's REM and OEM markets, products from these sites are also exported to Japan and Asean countries.

The company had been active on the mainland prior to its major consolidation in the 1990s and early 2000s. It formed a joint venture with Hefei Jianghuai Automotive, which it later sold to focus on its Asean market. Amid the mainland's booming automotive industry, however, APM is looking at the possibility of revisiting the region.

"We are receiving a lot of requests from customers, including Chinese companies, for us to go back to China as our engineering and technical expertise are gaining increased recognition," Fun says. "We are definitely evaluating our options, knowing that China is now the largest carmaker in the world - but the Asean market is still our No 1 priority."

APM takes pride in sharing the same corporate philosophy across its regional operations and maintaining a firm commitment to product quality and international standards. It boasts ISO 9001 quality management system certification and ISO 14001 and TS 16949 certifications for all its manufacturing subsidiary companies.

A testament to the company's uncompromising regard for quality and customer satisfaction is the growing number of awards and recognitions conferred by clients, industry experts and government institutions. Among these are the National Quality Manufacturing Award, Quality Management Award, World Excellence Award from Ford and Best Delivery Performance from Proton.

"We let our customers come and see our factory before they buy from us to let them validate our production process and make sure that we are really in the game," Tan says. "We also try to add value to our services by being close to our customers, following them wherever they go and being on call whenever they need us. This is the kind of service and commitment that we likewise aim to bring to the rest of Asia and the world."

One-stop tier-one supplier

To complement its overseas growth, APM is aggressively building up its engineering competency. It launched APM Engineering and Research last year to spearhead the training of all its engineers and R&D staff and support APM's future growth.

"In order to support our overseas expansion, we are strengthening our engineering skills and improving our domain knowledge," Fun says. "We are taking solid steps from being a component maker towards becoming a global one-stop tier-one system provider for the automotive OEM."

Apart from closely collaborating with customers on product development, APM also works with a variety of world-renowned technical partners such as NHK, Tokico (Hitachi), Mitsubishi Electric Company and Valeo.

"Working with such reputable technical partners has enabled us to become more confident in the international market, where foreign companies may not be familiar with APM," Tan says. "We hope to soon build a name for ourselves globally and make a change in the ball game."

One of APM's game-changing moves in the near future will be the launch of new products under its own brand. These include enhanced suspension systems that are slated for mass production in the next 12 months.

Taking its R&D to the next level, the company has also enlisted the support of American software design service provider Altair Engineering to facilitate its transition into an engineering-focused company.

"We have been very passionate and focused, putting lots of investment in our business. All the money we have made in the past has always been reinvested because we believe that this is the way to grow, by expanding our product range and moving upstream," Tan says. "We have to go up the ladder so that there is less competition and more room to maximise APM's performance as an engineering company."

The company launched two joint ventures last year with Luxembourg-based International Automotive Components (IAC) Group in Malaysia and Thailand. Combining IAC's global infrastructure and expertise as a tier-one supplier and APM's regional market knowledge, the joint ventures are expected to drive both companies' growth in the Asean region.

The joint ventures, named APM IAC Automotive Systems in Malaysia and IAC APM Automotive System in Thailand, will support multinational and domestic OEMs. Services will encompass design, engineering and manufacturing for a comprehensive range of vehicle interior components and systems.

APM welcomes additional partnerships and joint ventures, and is also open to acquisition opportunities that can help the company gain new and key technologies.

"Innovation equals sustainability. Our long-term vision is to strengthen not only the company's manufacturing capability but also innovation, design and engineering competencies," says APM Group finance senior general manager Lee Yuen Lin. "We are preparing ourselves to compete regionally and globally beyond being a quality supplier - as a tier-one one-stop supplier that adds lots more value in the supply chain management of our customers."

Fostering win-win partnerships

From its early years as a niche supplier to its continuing global expansion, APM has proved that partnerships are a crucial element in any successful business. The company is taking a similar approach as a way to give back to the society, co-operating with local universities where it can train potential engineers.

"We want to give something back as part of our corporate social responsibility," Fun says. "This is a mutually beneficial partnership with universities because it creates a venue where we can not only train students and our own industrial engineers and development staff but also enhance our recruitment process."

Among its recent partnerships is with the faculty of engineering and built environment of Universiti Kebangsaan Malaysia (National University of Malaysia). One of the first programmes spearheaded by APM Engineering & Research enables APM and the university to share knowledge on key areas such as computer-aided engineering applications for automotive system design and related parts.

A product of a similar internship programme sponsored by Ford, Fun believes that such initiatives will help potential APM employees from the universities to immerse in the company's culture and ultimately find job satisfaction. "This is important, especially in face of the growing challenge to recruit and retain competent engineers," he says. "We hope to make a difference and bridge the gap between industry and the academia because it is where innovation comes from."

APM is also working with another university purely for the process of developing manpower. It is also set to establish an APM Centre for Computer-Aided Engineering in another university this year.

"For the industry as a whole to grow, we need universities and young talents who can think out of the box," Tan says. "This collaboration will produce students who can actually contribute to the industry and become employable right when they graduate. It is a win-win for everybody."

http://www.scmp.com/article/1042329/apm-prepares-become-global-supplier