Good news for the Malaysian motorist

This week there was more good news for the Malaysian motorist. Expect to be more spoilt for choice at the end of next year with the news of some definitive VW plans to produce cars in Malaysia with their JV partner, DRB-HICOM. Car and Bikes in Malaysia are already way overpriced due to the extortionate taxes on motor vehicles in Malaysia. This is only cushioned by slightly lower excise tax on locally made and assembled motor vehicles. So, with this latest news from Veedub, Malaysians will finally be able access the continental car experience at a hopefully more reasonable price. Current VWs are price along almost the same exorbitant prices as premium brands like BMWs, Audis and Mercs. As Paul Tan rightfully points out below, it'll be interesting to see how the Germans view our market. Are we a sophisticated market or are we a unsophisticated market? I reckon we are the latter. Thanks to the unnaturally high prices of cars, price makes up the largest chunk of the average person's criteria when choosing a car. Of course some1 like me would choose value for money over absolute price and would place a higher consideration for technology, maintenance costs and resale value. Lets just see how things unfold. I'm already happy for the news of the CKD version of the Kawasaki Versys now open for booking. Looks like 2011 is a pretty good year for motorists, if u shut one eye to the fuel hike that is....  

Below is the original article from Paul Tan's blog:


vw hicom jetta

Volkswagen and DRB-Hicom today signed an agreement for local vehicle assembly in Malaysia, paving the way for VW to gradually expand its activities in Southeast Asia as part of its Strategy 2018 growth program.
The signing in Kuala Lumpur, which follows the MOU signed by both parties in August this year aimed at investigating the possibility of local vehicle production, was done in the presence of Prime Minister Datuk Seri Najib Tun Razak.
For starters, the Passat and Jetta sedans have been identified as the first VW models to be assembled here, and production is slated to begin from the end of 2011 at DRB-Hicom’s plant in Pekan, Pahang. The choice of powertrains or trim/spec levels weren’t announced, so we’ll all have to wait for details to unfold next year as the cars get closer to production.
VW hicom 1

DRB-Hicom stated that the operation is not to be seen as that of contract manufacturing, but rather a joint venture, with a significant involvement in the business – the planned ratio of DRB-Hicom’s investment is 70%, with VW injecting the remaining 30%. Pekan has a capacity to build 96,000 vehicles annually, and current capacity is just around a third of that, so there’s plenty of space in line with the new plans, though a significant amount of investment will be put in for infrastructure construction and product planning, among other things needed for the new venture.
Localisation in the assembly will certainly be an impetus, and the aim is to work towards a 40% local parts ratio on the Veedubs made in Pekan – VW will assist DRB in this localising aspect and help to identify suitable vendors, with everything having to conform to the tight quality control that VW is known for.
All this will move towards not just providing VWs for the local market, but for export as well. “Developing the market potential of the Asean region is of major significance for the Volkswagen Group’s long-term growth strategy,” said Christian Klingler, member of the board of management of Volkswagen AG with responsibility for sales and marketing.
vw hicom passat

He added that the Malaysian automobile market in particular, where more than 570,000 vehicles were sold in 2010, played an important role in the Group’s strategic planning. “We will be using existing structures and capacities at the DRB Hicom plant in Pekan to systematically extend our presence in the Malaysian market of the future,” Klingler added.
Plans are afoot to build further Volkswagen models for the Malaysian market on the basis of a local full scale production in the second expansion phase, from the end of 2012. This CKD assembly will have an initial annual capacity of several thousand vehicles and will be successively increased, and VW is looking at a figure of around 40,000 to 50,000 cars built annually, though that will be some time in the future.