Omnimatics leverages on strengths of its traditional parent company

• APM Automotive acquired a 52% stake in Omnimatics for RM2.225 million
• APM aims to grow to a RM2 billion turnover organisation by 2020

APM Automotive Holdings Bhd is one of Malaysia’s largest automotive components manufacturing groups, with revenues of RM1.2 billion in 2017, and a net income of RM39.1 million. Their products include car suspensions, radiators, interior parts – and now, CARdio, an innovative gadget likened to a “Fitbit for your car”.

If this seems an unusual turn for what seems to be a conventional manufacturing company, Low Seng Chee, APM Automotive CEO agrees.

“APM group has been in existence for well over 45 years and this is perhaps the first time of branching out into a digital era,” said Low. “There is a lot of opportunity to modernise.”

Extracting data from a car

In this new era of Industry 4.0 there is frequent talk of companies transforming or pivoting to meet the challenges of the new century. APM's response was just to simply go out and buy a company, so startup and digital, it ticks all the boxes.

“I was 28, I realised that okay, it's make-or-break at this point,” said Raj Kissu, Omnimatics Sdn Bhd CEO. He had been involved in startups before and was keen to begin one of his own. But in the meantime, he had to make ends meet by being part of the gig economy.

"It was through driving for Uber and Grab that I came upon this idea,” he continued. He realised that it was important for him to make sure that his car was well-maintained but wondered if there was a way to know when parts needed replacing.

It seems all he had to do was plug in and ask the car. “The technology that we leverage on in order to extract this data has been available since 1996,” said Raj. “By being able to analyse the data that the vehicle’s onboard computer outputs you can make rough predictions as to when possible breakdowns might happen.”

It’s a feature that has been leveraged on in the US and Europe by companies like Zubie, Automatic and Automile, taking advantage of the wealth of data that cars in those regions can offer. "That however was not the case in Malaysia which I found later on," mused Raj. “In Southeast Asia support for that was non-existent.”

Nevertheless, Raj persevered and WatchTower and Friends agreed to pre-seed Omnimatics for RM50,000 in exchange for 8% of the company.

When the traditional meets digital

APM took notice of Omnimatics about a year after this. “We met up with Raj and he seemed like a very enthusiastic young person," said Low. “Omnimatics obviously fits in very nicely with the APM growth plan with regards to how we can move along the technology curve,” he continued.

By ‘growth plan’ Low was alluding to APM’s intent to grow from what is currently a RM1.2 billion company to a RM2 billion turnover organisation in 2020.

In December 2016, APM Automotive acquired a 52% stake in Omnimatics for RM2.225 million.

Despite having been acquired by the APM group, Omnimatics is still regarded as its own company, which in some ways operates differently from its more traditional parent – for example, clock-in times.

"Obviously in a manufacturing concern you’ve got to be on time to turn the machine on and turn the machine off,” said Low, “But (Raj’s) machines are actually humans, so he can actually be more flexible!”

Leveraging on parental support

One and a half years after the acquisition, Omnimatics has been making progress, although more deliberate than breakneck. They have installed more than a thousand units of CARdio into cars owned by Mayflower and GoCar, who currently mainly use them to track their locations.

And more importantly, they’ve improved data collection. “As we do more research we realise that there are a lot more data points we can play with that we previously couldn't,” admitted Raj.

“Certain data points are very hard to pull given the way the car is designed,” pointed out Raj, “But now that we are working with Tan Chong (the sister company of APM)... it's easier to get some of these data points.”

This innovation has in turn sparked new plans and ideas. “They are looking at introducing diverse mobility to the consumer market,” said Raj referring to a trend identified by futurists where a decline in car ownership will be replaced by an increase in e-hailing and ride-sharing. “You don't need to look at ownership of vehicles anymore."

Whatever the future brings, Low is optimistic about how it will turn out. "The risk, there's hardly any for us,” he stressed. “We are not moving away from our traditional core, what we are dealing with Omnimatics is a new segment within the APM growth path.”

”Omnimatics fits in very nicely and obviously we are also in line to look at others as well,” concluded Low. “We view it as a constantly changing environment and if we do not get involved in some way, we will probably be left behind."

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