Malaysian Automotive Investments Gaining Traction

The Malaysian government says Daihatsu-owned Japanese manufacturer Akashi Kikai Industry will spend 700 million ringgit ($217.2 million) to set up a plant producing vehicle-transmission systems.

International Trade and Industry Minister Mustapa Mohamed tells Parliament the move is a result of the government’s effort to encourage investment in the production of high-value and critical components.

Media reports say a new company, Akashi-Kikai Malaysia, will build a 139,930-sq.-ft. (13,000-sq.-m) plant expected to open in November with a capacity of 150,000 units a year.

Akashi-Kikai Industry holds 51% of the new company, Daihatsu 39% and Malaysian automaker Perodua 10%.

The Edge newspaper quotes Mustapa as saying Honda is to spend up to MYR1 billion ($310.2 million) to boost production of its hybrid vehicles, while Mazda plans to spend another MYR400 million ($124 million) on top of the MYR300 million ($93 million) it already has invested.

Mustapa says more investment is headed Malaysia’s way.

“The government is also in talks with a company that plans to invest MYR2 billion ($620.4 million) in the production of an engine system,” he tells Parliament.

In another sign the country’s new National Automotive Policy is progressing, Mustapa attends a news conference announcing the granting of the first energy-efficient vehicle license to Go Automobile Mfg. (GAM), an original-equipment manufacturer for Chinese automaker Great Wall, since the NAP was implemented in January.

The Malaysia Automotive Institute says in a report posted on its website that Go, in partnership with Great Wall, will invest MYR2 billion to manufacture EEVs in Malaysia.

Go CEO Ahmad Azam Sulaiman says the project will be completed in three phases by 2018. He tells a news conference money for the project will be generated through banks and financial institutions in China.

Ahmad Azam says the first phase of Go’s plan, with an initial investment of MYR150 million ($46.5 million), will begin production in September. The second phase will involve production of 50,000 units starting in mid-2015 and the final phase, with a capacity of 100,000 units, will be in place by 2018.

He says Go will start off producing Haval M4 and H6 compact and midsize CUVs. They will be built at Go’s plant in Gurun, Kedah, 247 miles (395 km) north of Kuala Lumpur, and MYR500 million ($155 million) will be spent to upgrade the facility from its present annual capacity of 10,000 units, with 4,000 jobs to be created.

The partnership aims to export 60% of its production to other ASEAN members.

But The Sun Daily newspaper says the announcement leaves more questions than answers. It says Go is an unknown company with no known automotive background.

The newspaper cites a news release from the Malaysia Automotive Institute stating Go is a local company established in 2012, and began collaborating with Great Wall the same year.

“A quick search on Companies Commission of Malaysia (SSM) showed that the company was only registered on Feb. 14, 2013,” the newspaper says. “According to its corporate information in SSM, the company is the dealer and franchiser of motor-vehicles manufacturers, as well as warehousers of motor vehicles. However, no other details on the nature of its business can be found, and GAM has no official website.”

CEO Ahmad Azam was the only company official at the news conference announcing receipt of the energy-efficiency manufacturing license by Go.

“Despite bagging the first license, the company does not have business cards,” The Sun Daily says. “Ahmad Azam also refused to give the reporters his personal contact number, as well as the company's office number. When the reporters asked for his email address, Ahmad Azam gave his personal email address.

“Worth noting is that GAM's financial information is not applicable. Hence, applying for bank borrowings could be difficult since the company has no track record to point to.”

The Sun Daily quotes Malaysia Automotive Institute CEO Madani Sahari as saying at least six automakers have submitted applications for EEV customized incentives and one or two more companies are expected to receive EEV manufacturing licenses by end of this year.