Sime Darby, Malaysia's industrial and automotive conglomerate, aims to establish a luxury car retail venture in India while pursuing expansion opportunities in Indonesia to capitalize on the growth potential in both markets. Group Chief Executive Officer Jeffri Salim Davidson emphasized the significance of India, stating, "India is too significant to overlook. It's an enormous market that cannot be disregarded. Hence, we are exploring possibilities in India, seeking partnerships with local entities to initiate a car retail business there".
India, known as the world's most populous country, holds the position as the fifth-largest economy globally. Jeffri highlighted Sime Darby's plans for Indonesia, Southeast Asia's largest economy, expressing intentions to expand operations after forming a joint venture with a local company to sell BMW cars in Jakarta and Medan. Despite China contributing 35% of Sime Darby's revenue, the company foresees sustained demand for luxury cars in China, despite a slowdown in economic growth.
Jeffri highlighted that in China, the consumer demand for cars remains robust despite challenges in the market. He emphasized that the issue isn't about demand but rather a surplus in supply. Chinese car manufacturers increased production post-pandemic to secure market share, leading to an oversupply situation. Consequently, manufacturers reduced prices, impacting the profitability of retail distributors. Founded in 1910, Sime Darby is among Malaysia's oldest conglomerates, with diverse businesses spanning from plantations to manufacturing. Operating across 17 countries, the conglomerate underwent restructuring in 2017, divesting its palm oil and property segments, along with other ventures such as the recent sale of Ramsay Sime Darby Health Care.
Sime Darby's present focus is on industrial and motor businesses, which includes the assembly of Porsche cars in Malaysia and the distribution of BYD electric vehicles in Malaysia and Singapore. In a recent development, the company disclosed its acquisition of a 61.2% stake in UMW Holdings, a Malaysian automotive-to-manufacturing firm that assembles Toyota cars in Malaysia and holds a stake in local car manufacturer Perodua, for 3.57 billion ringgit ($767.41 million) in August. Jeffri anticipates this move to position Sime Darby as the foremost player in Malaysia's automotive sector, potentially capturing more than 50% of the country's automotive market share. He remarked, "Our main focus has been on the luxury segment, but this acquisition enables us to penetrate the mass market, allowing us to cover the entire value chain".