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President's Statement

Extracted from Annual Report 2017



2017 was slated by many to be a challenging year for the automotive industry. After six consecutive years of growth, including the highest ever total industry volume (TIV) in 2015, Malaysian auto sales finally saw a downturn in 2016, when registrations fell 13% to 580,124 units. Vehicle registration continued to fall in 2017 with only 576,635 vehicles registered (Source: Malaysian Automotive Association).

While there may be a variety of factors that may have contributed towards such decline but I believe among them would undeniably be the sluggish economy and the weak Ringgit.

However, with the continued strengthening of the Ringgit against the US Dollar from the 4th quarter of 2017 onwards, Malaysia’s economy is expected to continue growing at faster pace with GDP growth for 2017 expected to expand from 5.2% to 5.7% compared with 4.3% to 4.8% as previously estimated (Source: Malaysia Budget 2018).

The environment in which the Group operates is competitive with constant downward pressure on its bottom line. Whilst overall business conditions in 2017 have been nothing short of challenging, APM’s robust and resilient foundation built around its core values has enabled it to safely circumnavigate pass the murky waters and obstacles of 2017.

This foundation is what APM believes to be one of the keys to its success.

In 2017, we focused on the enhancement of productivity, process improvement, manufacturing automation and intensification of research and development (“R&D”) activities. The Suspension Division broadened its production line to include the cold coiling manufacturing process. Our R&D team has successfully developed our owned shock absorber.

As testament to our commitment to excellence, the Group received several prestigious awards including the Most Sustainable Brand Award for 2016/2017 by The Brand Laureate, Proton Quality Award Rank A for 2017, Superior Quality & Delivery Performance and Continuous Rank-A by Astra Daihatsu (Indonesia), Perodua Excellent Safety President Award and Most Improved Vendor for Sales Part Delivery and Quality Performance by Perodua and Outstanding Quality Performance by Toyota.

Without wanting to rest on our laurels, we will continuously strive to improve ourselves in delivering outstanding performance, products and services.


APM Group’s success as one of the largest automotive Original Equipment Manufacturer (“OEM”) in Malaysia was founded on the continued fulfilment of its vision statement that is "To be a global automotive systems supplier, providing one-stop Tier-One service to OEM’s". APM recognizes that change is constant and has to be embraced. This has resulted in APM embarking on the transformation for growth since year 2014. The primary goals of the Group is to focus on regional market expansion, revenue diversification and prioritising R&D. Moving forward, the Group revised its vision statement to, "A globally preferred innovative mobility solutions provider" to emphasize on its ambition.

The Group then went on to renew its mission statement and to present the Group’s strategic approach in empowering its employees to nurture and establish a culture of team spirit by “Forging Ahead Together”. These are clearly demonstrated in the following Mission Statement:-

  • Cultivate a sustainable team-oriented culture involving employees through leadership & accountability; and
  • Value creation through operational excellence, innovation and exemplary customer service.

Brandlaureate Award


While focusing on achieving strong financial performance, APM recognises the importance of social and environment sustainability. Implementation of the Group’s sustainability framework commenced in 2017.

The Group’s flagship investment and building of a solar power facility for power generation demonstrates its commitment towards environment sustainability.

On the social front, recognising performance, creating a safe place to work, increasing employee engagement, providing community aids and so on, are some of the approaches that APM has adopted to illustrate its commitment as a responsible organisation.

The details of the Group’s sustainability journey is captured in the “Sustainability Statement” section of the Annual Report.


The financial year ended 31 December 2017 was marked down by the massive slowdown in the local automotive industry following the continued weakening of Ringgit against the US Dollar, softened domestic demand for motor vehicles and more stringent hire purchase approval. New vehicle production in Malaysia suffered a 8% drop whereby the Total Production Volume (“TPV”) of new vehicles fell from 545,253 units in 2016 to 499,639 units in 2017 and this invariably impacted the Group’s revenue from OEM’s segment.

The Group registered a revenue of RM1,188.5 million and profit before tax of RM71.4 million for the year, representing a decrease of 3.9% and 14.2% respectively compared to 2016. However, operation in Indonesia recorded impressive revenue growth. This is largely due to the extensive sale and take up of the Group’s leaf springs in the local replacement market.

On the other hand, lower demands for OEM parts and the phasing out of certain vehicle models have severely affected the Electrical and Heat Exchange Division’s bottom line.

The Interior & Plastics Division remains as one of the largest contributors to the Group’s top-line, at 52.8% of the Group’s revenue.

A more detailed version of the Group’s financial performances and business segments performance review can be seen in the “Management Discussion and Analysis” section of the annual report.


The Board recommends the payment of a single-tier final dividend of 8.5 sen per ordinary shares for the financial year ended 31 December 2017 (2016: 10 sen per ordinary share) for shareholders’ approval at the forthcoming Annual General Meeting. Combined with the earlier interim single-tier dividend of 4.5 sen per ordinary share paid on 29 September 2017, the total dividend for the year is 13 sen per ordinary share (2016: 15 sen per ordinary share), if the proposed final dividend is approved by the shareholders.

As far as circumstances permit, the Board endeavours to maintain a consistent dividend payout. For the past 3 years (2015 to 2017), the Group has declared dividend representing a dividend payout ratio of approximately 60% to 65% of its net profit attributable to the owners of the Company.


The World Bank projects Malaysia’s economy to remain strong into 2018 with a growth of 5.2%, though slightly slower compared with the expected 5.8% growth in 2017, supported by both the domestic and external demand (Source : The World Bank – Malaysia Economic Monitor Report – December 2017). The increase in the Overnight Policy Rate by 25 basis points in 25 January 2018 by the Bank Negara Malaysia indicated the economy is firmly on a steady growth path.

2018 may prove to be an exciting year for the Malaysian automotive sector, particularly in view of Zhejiang Geely Holding Group Co Ltd’s (“Geely”) substantial stake in Proton which will provide the Chinese giant carmaker with a springboard into the Asean car market. This may lead to other car makers to amplify their respective vehicle line and production as they would not wish to relinquish any market share. While such anticipated activities will be welcomed by auto parts suppliers like APM but in reality, it may be offset by the continued rising of operating costs.

Perhaps the Malaysian Automotive Association (“MAA”) did take such rise of operating cost into account when they forecasted only marginal growth in Total Industry Volume (“TIV”) by 2.3% in 2018 to 590,000 units compared to 576,635 units achieved in the year 2017. Higher cost of imported material especially steel price, the recent hike in the natural gas tariff by 23% as well as increase in manpower cost arising from the implementation of the Employment Insurance Scheme (“EIS”), shift of foreign worker levy burden to employers and the review of minimum wage levels will potentially weigh into our margins.

McConnell Seat Australia Pty Ltd’s new building at Melbourne, Australia

The future of the automotive industry appears to be shifting towards alternative and disruptive technology with carmakers intensifying their focus on research and development on the lowering of emissions and the reduction of carbon footprint, development of substitute fuel source, investing in-car technology and adapting to changing patterns of vehicle use.

Despite the challenges in the operating environment, we remain steadfast in pursuing our 5-year transformation plan with clear strategies in advancement of technology, process improvement, regional expansion and branding priorities. We believe these strategies will sustain our business and emerge stronger.

4x4 Suspension Kits


On behalf of the Board, I would like to express our heartfelt appreciation to the management and staff for their effort and contribution to the Group’s progress, as well as our shareholders for their support and confidence. I would also like to thank all our business partners, suppliers and distributors for their commitment in working with us and loyalty over the years. In concluding, I express my sincere gratitude to my fellow Board members for their valuable advices and guidance in shaping the Group strategies to secure sustainability.

On behalf of the Board,

Dato' Tan Heng Chew

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