Warisan TC Holdings Bhd (WTCH) has taken a significant step into the electric vehicle (EV) market by securing an exclusive agreement of distribution and service with China's GAC AION New Energy Automobile Company Limited (GAC AION) through its subsidiary, WTC Automotif (M) Sdn Bhd (WTCA).
Under the three-year agreement, WTCA will serve as the sole and exclusive distributor of GAC AION's electric vehicles and spare parts in Malaysia.
This includes the import, distribution, sales, and after-sale services for GAC AION's EVs, marking a strategic move for WTCH into the rapidly evolving EV sector.
GAC AION, under GAC Group, is a prominent electric vehicle manufacturer headquartered in Guangzhou.
Since its establishment in 2017, GAC AION has excelled in the research, development, and production of electric vehicles, boasting a diverse lineup that includes sedans, SUVs, and super sports cars, with over 480,000 battery electric vehicles sold in 2023 and manufacturing plants in China and Thailand. The agreement allows WTCA to appoint dealers for the distribution of GAC AION's vehicles and spare parts, contributing to the expansion of EV offerings in the Malaysian market.
With potential for renewal, the partnership positions WTCH as a key player in the electric vehicle landscape.
The move aligns with WTCH's broader business diversification strategy and its commitment to Economy, Environmental, Social, and Governance (EESG) principles for long- term sustainable growth.
By venturing into the electric vehicle sector, WTCH aims to leverage synergistic benefits and economies of scale, building on its existing expertise in assembly, distribution, and sale of commercial and passenger vehicles.
Despite the funding requirements for working capital, the agreement is not expected to have a significant impact on WTCH's financial metrics for the fiscal year ending December 31, 2024.
The decision to enter the electric vehicle market is seen as a strategic move to broaden WTCH's earning base and stay at the forefront of the evolving automotive industry.
Directors at WTCH express confidence in theagreement, stating that it is in the ordinary course of business for WTCA and is in the best interest of the group.