MARC Ratings has affirmed its AIS rating on Tan Chong Motor Holdings Berhad's (TCMH) RM1.5 billion Islamic Medium-Term Notes (Sukuk Murabahah) Programme. The rating outlook remains negative.

TCMH's business performance remained weak, as vehicle sales decreased and domestic market share declined to about 0.8% as of end-September 2025 (2024: 1%; 2020-2023 average: 2.3%), mainly due to falling Nissan sales amid limited new models. To diversify its portfolio, TCMH was appointed super dealer for China-based Guangzhou Automobile Group Co, Ltd (GAC) vehicles in Malaysia, with principal-level responsibilities held by Warisan TC Holdings Group. Recent GAC launches of GAC GS3 Emzoom and AION Y Plus have been well received, with 734 units sold (RM77.9 million) following their launch in 4Q2024 and a backlog of 139 units valued at RM21.7 million as of end-October 2025. In May 2025, TCMH also partnered with Chinese automaker SAIC-GM-Wuling Automobile Co Ltd (SAIC-GM) to introduce TQ-Wuling-branded electric vehicles (EV), launching its first model, Bingo, in December 2025 with deliveries starting in 2026. Priced below RM100K, the model is positioned to capture growing EV demand. Overall, partnerships with GAC and SAIC-GM have broadened TCMH's product line-up.

On 13 November 2025, TCMH's 70%-owned subsidiary Tan Chong Motor Assemblies Sdn Bhd signed a Letter of Intent with Perodua Sales Sdn Bhd to provide electro-deposition coating and painting services and lease select EV assembly lines, with a formal agreement expected to be finalised by 1Q2026. The rating agency views this deal and TCMH's ongoing diversification positively, as they help utilise under-used assembly capacity, which has been weakened by subdued Nissan sales, and support fixed-cost coverage. TCMH appears to be on a path towards operational improvement, though earnings benefit remains modest at this stage. The company's capital structure remains stable (debt-to-equity ratio: 0.54x), and liquidity is adequate bu