China Automobile Sees Higher Earnings From European Market

KUALA LUMPUR, Aug 28 (Bernama) -- China Automobile Parts Holdings Ltd (CAP) projects higher earnings contribution from the European market in the long run, surpassing contribution from Asia. CAP Managing Director Li Guo Qing said currently Asian market is the major contributor for the chassis components manufacturer's earnings, which stands at 20 per cent of the overall earnings. To further boost its future earnings, the company today signed a Memorandum of Understanding (MoU) with a German-based automotive company, Protev Asia Ltd. To date, Protev has operations in 12 European countries as well as North, South and Middle America. "Through this partnership, we will be able to open the door of business opportunity for CAP to reach the European market via the vast network that Protev has. We are confident that the venture will contribute positively to the company’s bottomline going forward," said Li. Li was speaking to reporters after the signing ceremony between the two companies here. Under the MoU, CAP will leverage on Protev's extensive distribution and business relationship with international automobile companies. Through the same collaboration, CAP will supply chassis components for trucks in the European market. Meanwhile, Protev President Herbert Tukacovic said via the 50-50 joint venture, CAP would supply about 40 per cent spare parts to its total supply chain. "Our target customers in Europe will be Mercedes Benz, Bavarian Motor Works and Scania which have very high production volume per annum," said Tukacovic. CAP's pre-tax for the second quarter ended June 30, 2014 declined to US$7.39 million (RM23.270 million, US$1 = RM3.14) from RM26.850 million in the same period a year ago, while revenue also decreased to RM101.917 million from RM104.817 million previously. --BERNAMA