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Oversea Venture

Having served Malaysian consumers for over three decades, TCMH Group has since

spread our wings globally. The vital reason for TCMH Group for forming an oversea

venture is market access. This is because the Group lacks a basic understanding of

customers and the relationship/infrastructure to distribute their product to customer.

Forming oversea venture with the right partner can provide instant access to established,

efficient and effective distribution channels and receptive customer bases.

Basic element of an oversea venture is contractual agreement, specific limited

purpose and duration, joint property interest, common financial and intangible goals and

objectives and shared profits, losses, management and control. (I)Contractual

agreementmeans that oversea venture established by express contracts that consists of

one or more individuals or organizations and that are entered into for a specific business

purpose. Specific limited purpose and duration that oversea venture are formed for a

specific business objective and can have a limited life span or be long-term. Oversea

venture frequently established for a limited duration. (II)Joint property interestis that

each oversea venture participant contributes property, cash or other asset and

organizational capital for the pursuit of a common and specific business purpose.

Therefore, we can say that an oversea venture is not merely a contractual relationship, but

rather the contributions are made to a newly formed business enterprise, usually a

corporation, limited liability company or partnership. (III)Common financial and

intangible goals and objective is that the oversea participants share a common

expectation regarding the nature and amount of the expected financial and intangible

goals and objectives of the oversea venture. (IV)Shared profits, losses, management

and control is that oversea venture share in the specific and identifiable financial and

intangible profits and losses, as well as in certain elements of the management and

control of the oversea venture.1

1The University of Iowa Center for International Finance and Development

http://www.uiowa.edu/ifdebook/faq/faq_docs/Venture.shtmlhttp://www.uiowa.edu/ifdebook/faq/faq_docs/Venture.shtml

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In 2013, a Master Agreement with Renault S.A.S in respect of manufacturing,

marketing and servicing of Renault cars in Malaysia and joint venture in Thailand via TC

Capital (Thailand) Company Ltd for provision of equipment leasing. Beginning in 2005,

the Group had made dominant inroads into the overseas market by expanding our

automotive business operations overseas with the assembly of bus chassis and sale of

buses in Vietnam, besides the provision of automotive workshop services in Cambodia

and Thailand. And in December 2009, TCMH Group successfully obtained an

Investment Certificate from the Danang Industrial and Export Processing Zones

Authority, Vietnam to undertake the manufacturing, assembly and sale of buses, trucks

and passenger cars, as well as provision of after-sales services and sale of spare parts. For

this purpose, the Group has leased a piece of industrial land in Danang City, Vietnam. A

year later, TCMH Group entered into Distribution Agreements with Nissan Motor Co,

Ltd in March 2010 that granted us the sole and exclusive rights to distribute completely

built-up (CBU) Nissan brand vehicles for the Cambodia and Laos markets.

Whilst in October 2010, the Group successfully acquired 74% charter capital in

Nissan Vietnam Co., Ltd (NVL) with the remaining 26% held by Nissan Motor Co., Ltd.

NVL is principally involved in the importation and distribution of Nissan vehicles in

Vietnam.

In December 2010, Tan Chong Motorcycles (Laos) Co Ltd, a wholly-owned

subsidiary was established in the Savan-Seno Special Economic Zone in Lao PDR that

allows the Group to undertake the assembly, sale and distribution of SYM (Sanyang

Industry Co. Ltd) motorcycles. Thus, the oversea venture strategy made by the company

Tan Chong Motor Holdings Berhad (TCMH) has brought great success to the company.

REFERENCE

http://en.wikipedia.org/wiki/International_Joint_Venture#Basic_Elements_of_an_IJV

http://www.tanchong.com.my/companybackground.html

http://www.tanchong.com.my/corporateinfo.html

http://en.wikipedia.org/wiki/International_Joint_Venture#Basic_Elements_of_an_IJVhttp://en.wikipedia.org/wiki/International_Joint_Venture#Basic_Elements_of_an_IJVhttp://www.tanchong.com.my/companybackground.htmlhttp://www.tanchong.com.my/companybackground.htmlhttp://www.tanchong.com.my/corporateinfo.htmlhttp://www.tanchong.com.my/corporateinfo.htmlhttp://www.tanchong.com.my/corporateinfo.htmlhttp://www.tanchong.com.my/companybackground.htmlhttp://en.wikipedia.org/wiki/International_Joint_Venture#Basic_Elements_of_an_IJV