Pecca Group Partners with Shanghai Launch to Advance Automotive Technology in Malaysia
KUALA LUMPUR (March 10) – Upholstery manufacturer Pecca Group Bhd (KL:PECCA) has entered into an agreement with Chinese automotive technology player Shanghai Launch Automotive Technology Co Ltd, setting the stage for consultancy services in Malaysia. The deal, finalized on Monday, will see Pecca acting as Shanghai Launch’s exclusive sales and marketing partner and consultant within Malaysia.
Pecca will advise and assist the Chinese company in its dealings with end customers, focusing on automotive design, development, and related products and projects. According to Pecca’s chief executive officer, Foo Ken Nee, this partnership will allow both companies, as well as Malaysia, to move up the supply chain while boosting automotive technology and local content customization.
Expanding Horizons in the Automotive Sector
Speaking at the agreement signing ceremony, Foo explained that Pecca is exploring opportunities in both internal combustion engine-powered cars and electric vehicles (EVs), with a primary focus on EVs. “We have been aiming to be a larger automotive contributor in Malaysia,” Foo stated. “That means that we want to be able to expand from where we are for the last 25 years, purely just managing business in tier-2, providing car leather seat (covers). We are looking at moving up the supply chain to be able to work on seat assembly, potentially to the designs as well.”
Foo emphasized the necessity for Pecca to evolve to ensure its long-term viability. He stated, “What we are trying to build is what the next 25 years are going to look like. We have done well in the first cycle of tier 2 activities that we have been doing. If we do not move ahead and adapt ourselves to the new environment and look for new opportunities for growth, we will eventually lose out to competition, we will lose out to new creative ideas, and we will not be growing ourselves.”
Collaboration and Knowledge Transfer
Under the partnership, Pecca will provide consultancy services by leveraging its expertise in manufacturing, after-sales service, and local market knowledge, including consumer preferences, regulatory requirements, and industry trends. The collaboration is also designed to facilitate the transfer of technology and knowledge to Malaysia’s automotive workforce.
Shanghai Launch, recognized as one of China’s pioneering independent automotive research and development institutions, specializes in vehicle design, development, and turnkey projects covering styling, chassis development, powertrain engineering, and performance analysis. Shanghai Launch chairman Wang Xun highlighted that this marks the company’s initial collaboration in Malaysia. In Southeast Asia, Wang noted that Shanghai Launch previously assisted a Vietnamese car manufacturer in transitioning from a small local brand to the leading EV manufacturer in the country.
“We are looking forward to having this kind of case in Malaysia through this cooperation with Pecca. This cooperation with Pecca will [accelerate] the transition of the automotive industry in Malaysia [with the rise of EV],” Wang added.
Financial Outlook and Market Performance
Commenting on the group’s prospects, Pecca’s Foo anticipates another record performance for the financial year ending June 30, 2025 (FY2025), largely driven by its automotive segment. “We are also looking for efficiency improvements in our operations. In terms of overall sales, we will look into expanding to new markets as well as expanding the replacement equipment manufacturer (REM) segment, which may not have been that significant previously,” said Foo.
The REM segment contributed RM4.01 million, or 3.4% of Pecca’s total revenue of RM118.56 million during the first six months of FY2025. Pecca’s net profit rose 13.3% to RM29.91 million during this period, compared to RM26.39 million in the same period the previous year, despite an 8% decline in revenue to RM118.56 million from RM128.8 million. The increase in earnings was attributed to reduced administrative expenses, finance costs, and increased finance income. At the end of December 2024, the group had RM108.55 million in cash and cash equivalents, against total borrowings of RM5.49 million.
On Monday, Pecca shares closed up two sen, or 1.3%, at RM1.52, giving the group a market capitalization of RM1.14 billion.
