Malaysia has awarded a manufacturing licence to a 2 billion ringgit ($A662.
27 million) venture that will assemble fuel-efficient SUVs for China’s Great Wall Motor Co Ltd.
The licence was the first issued under the country’s new car policy unveiled in January, aimed at making Malaysia a regional centre for energy-efficient vehicles.
Trade Minister Mustapa Mohamad said on Wednesday Go Automobile Manufacturing will invest 2 billion ringgit over the next four years to expand its manufacturing plant in northern Kedah state. It will have a production capacity of 100,000 vehicles when ready in 2018, with 60 per cent of the output to be exported to Southeast Asian countries, he said. About 4000 jobs will be created.
“This is a very important milestone” for Malaysia’s vehicle industry, he said.
Mustapa said more manufacturing licences are expected to be issued this year to bolster the auto industry.
The new car policy is the latest step in a gradual liberalisation of Malaysia’s protected car market. The government previously only issued new manufacturing licences for vehicles with engine size of 1.8 litres and above to protect national car makers Proton and Perodua.
But intense competition from neighbours Thailand and Indonesia is forcing Malaysia to loosen up its policy to woo investors.
Go Automobile’s plant will assemble the Haval M4 and the H6 sports utility vehicles, with petrol and diesel engines at 1.5 and 2.0 litres, said Go’s chief executive, Ahmad Azam Sulaiman.
He said the vehicles will have local content of up to 85 per cent by 2018 and will be initially exported to Thailand and Cambodia.
Great Wall Motors, the 8th largest auto company in China and its biggest sport utility vehicle maker, may take a stake in the Malaysian plant in the future, Ahmad Azam said.
Roger Wang, a senior executive with Great Wall Motors, said the company’s sales reached 760,000 cars last year and is targeted to rise to 890,000 this year. The company is listed on the Hong Kong and Shanghai stock markets.
Wang said Southeast Asia, with more than 500 million people, is a significant region for Great Wall Motors, which last year exported 70,000 cars.
Great Wall currently sells two models in Malaysia through a local distributor. The company is likely to make Malaysia its Southeast Asian production base, executives said.
The government hopes its new auto policy will boost total industry production to 1.25 million vehicles and exports to 250,000 vehicles by 2020.
Last year, Malaysia’s vehicle production was around 570,000 vehicles and exports were 20,000 vehicles. That was dwarfed by Thailand which makes more than two million vehicles a year and by Indonesia with annual production exceeding one million.