DRB-HICOM Berhad through its wholly owned subsidiary, Edaran Otomobil Nasional Berhad (EON) shall expand its presence in the aftersales services market via a joint venture with the world’s fifth largest fast-fit service brand, Saudi's Petromin Express, a subsidiary of Petromin Corporation (Petromin).
The joint-venture agreement with Saudi Arabia’s Petromin will bring together DRB-HICOM and EON’s presence in the automotive value chain with Petromin’s operational expertise and track record in fast-fit aftersales franchise model to capture the fast and growing aftersales segment in Malaysia.
The proposed new joint venture will be 51:49 percent, shared between Petromin and EON.
The agreement between the two companies was signed at a ceremony at Wisma DRB-Hicom today. Signing on behalf of EON was its CEO Akkbar Danial, while the signatory for Petromin was Group CEO, Kalyana Sivagnanam. The signing was witnessed by DRB-HICOM Group Managing Director, Dato’ Sri Syed Faisal Albar and the senior management team of both companies.
Syed Faisal added “Petromin’s collaboration with DRB-Hicom will allow it to enter into the lucrative Malaysian aftersales servicing market by partnering with a well-established and trusted corporate brand in the automotive sector.”
“Their vast know-how and experience coupled with DRB-Hicom’s market intelligence and extensive customer reach will create an ideal synergy that will propel this partnership to great heights. At the same time, we are very excited to be offering a new, affordable and convenient service to Malaysians,”
The EON-Petromin joint venture company targets to commence pilot operations of the business in January 2023, with four outlets during the 18-month pilot. Modelled after Petromin’s highly successful Petromin Express outlets in Saudi Arabia, the joint venture company aims to offer vehicle owners a unique experience of fast-fit aftersales services with a quick turnaround time.
The fast-fit EON-Petromin service stations will target aftersales for cars ranging between 5-10 years old
This joint venture aims to capture part of the large and growing automotive aftersales market in Malaysia, which in 2021 generated revenue of approximately RM 42b in 2021. While the services will be offered to all vehicles, the company will be targeting post-warranty vehicles aged between 5 and 10 years. The pilot will enable management to derive a longer strategic roadmap for the business including capital requirements for expansion.
The collaboration complements DRB-Hicom’s existing and extensive automotive value chain. The Group is already an OEM via , retails several foreign automotive brands under the EON umbrella and also offers mandatory inspection services via Puspakom.
Petromin distributes vehicles in Saudi Arabia and more recently acquired distributorship for Stellantis brands in 2021
The partnership with Petromin provides an excellent opportunity for DRB-Hicom to tap into Petromin’s wealth of experience and know-how. It operates the world’s fifth largest aftersales network with over 700 outlets across Saudi Arabia.
The Petromin lubricant brand controls the Saudi market with a 40% share, and exports to over 35 countries in the Gulf, Middle East, Africa and also Asia. Petromin also operates gas stations under the same brand and distributes Nissan and Stellantis vehicles in the kingdom.