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Japan's Daihatsu is building a RM222 million ($73.7 million) plant in Malaysia to produce electronic automatic transmissions for local auto maker Perodua’s range of vehicles.

Production is to begin in November with an initial output of 150,000 units a year.

The Malaysian Investment Development Authority says the factory is being built by Akashi-Kikai Malaysia, a joint venture among Daihatsu, Japan’s Akashi-Kikai Industry and Perodua.

The new JV is 51%-owned by Akashi-Kikai Industry, 39% by Daihatsu and 10% by Perodua.

Daihatsu says while the ratio of vehicles with automatic transmissions is high in the Malaysian market, no auto maker has manufactured them locally.

“We will focus on Perodua first before we consider exporting” the transmissions,

Akashi-Kikai Industry President Noriyoshi Matsushita tells The Star newspaper.

He says the company has five similar plants and 60 vendors in Japan, but it will give local businesses the opportunity to supply parts to the Malaysian operation.

“We will start with 10 local vendors and see how this could be expanded,” he says.