Daihatsu, Perodua Team to Build, Run Malaysia Plant

Daihatsu and its longtime partner Perodua will build a 100,000-unit-a-year plant in Malaysia at a cost of RM790 million ($258.1 million).

The Toyota small-car subsidiary is creating a new company with Perodua to build and operate the yet-to-be-named facility alongside the Malaysian auto maker’s 19-year-old, 200,000-unit plant in Rawang, 22 miles (35 km) north of Kuala Lumpur.

“As the Malaysian government is working to develop a global competitive automotive industry in preparation for future market liberalization, Perodua and Daihatsu plan to manufacture fuel-efficient, affordable compact cars at the new plant, which will act as a model for manufacturing high-quality motor vehicles at low cost,” Daihatsu says in a statement.

Daihatsu and parent Toyota share a 51% equity interest in Perodua, which launched production in 1994. Daihatsu holds a major, non-controlling stake in Perodua’s Malaysian sales and distribution operations.

Daihatsu says it is structurally transforming local operations in Malaysia, which it deems a key base for its overseas business, in anticipation of intensifying global competition in the future.

“The new company will move forward with building a new plant and strengthen a local procurement infrastructure, along with transforming existing plants, in an effort to enhance its global competitiveness,” the statement says.

The new 699,654-sq.-ft. (65,000-sq.-m) plant will employ 1,200 workers. It will begin full operations in mid-2014.

Perodua Managing Director Aminar Rashid Salleh tells The Star newspaper the facility will have more automation, improved systems and new technology and is essential for the Malaysian auto maker to compete at a global level.

Perodua aims to increase its exports to 20,000 units annually by 2015, double the 10,000 exported this year to the U.K., Sri Lanka, Nepal, Mauritius, Brunei, Singapore and Fiji. The Myvi subcompact also is exported to Indonesia under the Daihatsu Sirion badge.

“This new plant is part of our 5-year strategic roadmap to stay competitive in the ever-liberalizing automotive industry by helping us to be more productive and efficient, as well as reduce costs,” Aminar says.

“There is increasing competition also in the domestic market. We also want to at least maintain our dominant 28% to 30% domestic market share.”

The Malaysia Automotive Institute predicts light-vehicle sales in the country will top 1 million units by 2020, up from 600,123 in 2011.

Aminar says Perodua sold 170,000 units in the first 11 months and is expected to reach a full-year total of 188,000.