This article first appeared in The Edge Financial Daily, on October 22, 2015.

KUANTAN: Mercedes-Benz Malaysia Sdn Bhd, which saw its sales of new commercial vehicles rising by 15% over the past three years, is seeing an increasing preference for new vehicles compared with repossessed or second-hand ones among Malaysian buyers.

Its commercial vehicles division sales and marketing vice-president Albert Yee said new owners seem to be choosing new vehicles because they have more benefits.

“The Malaysian market has a mixture of new commercial vehicles and rebuilt, repossessed or used vehicles. Over the past three years we have experienced an increase in demand for new vehicles.

“The owners see benefit in buying new vehicles because they come with a two-year warranty and first-year unlimited mileage, despite the fact that used vehicles are cheaper. I’m not saying used trucks are not good, but I do see a trend shifting towards new vehicles.

“And this trend is increasing, we are seeing faster sales now,” explained Yee to a press conference after conducting a tour of Mercedes-Benz Malaysia’s Pekan production plant here, yesterday.

This year alone, Mercedes-Benz Malaysia has exceeded its sales target for commercial vehicles in Malaysia. To date, the company has sold 142 units of its Mercedes-Benz MP3 Actros truck, and expects the figure to hit more than 200 by year end.

Among the contributing factors, said Yee, is the entire product package, including the after-sales support provided to their customers, coupled with the product’s fuel economy, safety and comfort features.

The visit yesterday also coincided with the official roll-out of Mercedes-Benz Malaysia’s 25,000th commercial vehicle, which the company celebrated with members of the press.

“The 25,000th truck already has a buyer. We are going to deliver the truck and celebrate with the customer at his premises,” said Yee.

Even though the 25,000th truck was produced at the Pekan plant, it is not the 25,000th vehicle to roll out of the plant as the company has been in Malaysia since 1964.

As to whether or not the Pekan facility will expand its production lines, the company’s production plant vice-president Ingbert Grombach said Mercedes-Benz Malaysia has the space for expansion if there is market demand to support it.

“We would be more than happy to put in more production lines if market demand requires this. We have enough space here to increase our production and portfolio. If there is market demand for vans, for instance, we can assemble them here,” said Grombach.

Regarding the plant’s preparation for the upcoming yearly monsoon floods, Grombach said since the facility is on high ground, production is not directly affected.

“The risk of flooding is out of my control but we are working on flood mitigation. Fortunately this plant is higher than its surrounding areas and we are not affected by flooding directly but we have indirect impact from material transports not arriving here on time.

“But we have overcome this by overtime to cover for loss of production time,” explained Grombach.

On whether the company will revise the price of its commercial vehicles due to the weakening ringgit, Yee reiterated the company’s stand that this will not be happening — at least not any time soon.

“We already have our tools on currency exchange in place to allow us to ride it out. So, for the short term, there will not be any price revision due to the weakening currency,” said Yee.

Cycle and Carriage Bintang Bhd, which holds a 49% stake in Mercedes-Benz Malaysia, closed at RM3.26 yesterday, up 7 sen or 2.19%, for a market capitalisation of RM328.43 million.