Sunday, August 15, 2010

DRB-HICOM signs pact with Volkswagen

KUALA LUMPUR: DRB-HICOM Bhd has signed a memorandum of understanding (MoU) with Volkswagen AG to assemble and manufacture Volkswagen vehicles in Malaysia.

The MoU paved the way for Volkswagen and DRB-HICOM to jointly plan the production of Volkswagen models in Malaysia and an agreement would also include strengthening Volkswagen’s existing sales activities and market presence in the country, DRB-HICOM group managing director Datuk Seri Mohd Khamil Jamil said in a media statement yesterday.

“This MoU is the culmination of intense discussions and both parties anticipate the production of the CKD (completely-knocked dow) models in Malaysia,” he said.

The statement said both Volkswagen and DRB-HICOM had planned for CKD operations of Volkswagen cars in Pekan, which is DRB-HICOM’s largest automotive manufacturing facility in Malaysia.

(From left) Volkswagen head of sales for China and Asean Wei Ming Soh, Volkswagen senior vice-president, group manufacturing overseas Dr Christof Spathelf, Datuk Seri Mohd Khamil Jamil and DRB-HICOM CFO Datuk Lukman Ibrahim at the signing ceremony

Volkswagen Group Malaysia Sdn Bhd said the joint plans, which fit into its 2018 strategy plan that would see expansion into South-East Asia, envisaged the production of Volkswagen models in Malaysia to start from 2012.

“We hope the entry of Volkswagen, Europe’s biggest vehicle manufacturer, into Pekan would help to spur its transformation into a vibrant and self-sustaining regional automotive hub, as envisioned under the East Coast Economic Region initiative,” said Khamil.

He added that the DRB-HICOM group would also look at engaging the full participation of its component manufacturing companies in a move to support Volkswagen’s localisation programme in line with the National Automotive Policy.

“We are looking forward to an exciting future with Volkswagen and we foresee a mutually beneficial and successful partnership, especially in promoting and augmenting the national automotive industry,” said Khamil.

The MoU, which was signed at Volkswagen Centre in Singapore, came after talks between Proton Holdings Bhd and Volkwagen on a strategic partnership ended in June after both parties failed to agree on terms.

Prior to Proton commencing talks with Volkswagen, DRB-HICOM was already negotiating with the German carmaker on a possible collaboration in Malaysia.

Multiple discussions were held and Volkswagen officials had conducted a site visit to Pekan to assess the suitability of the plant for production of their cars.

Volkwagen officials were impressed that DRB-HICOM’s automotive complex in Pekan, which sees the assembly and manufacture of Suzuki and Isuzu vehicles, was assembling Mercedes vehicles.

Sources said the fact that the flagship S-Class was being assembled at the plant was testimony to the calibre of the plant’s suitability to assemble other types of vehicles.

Discussions between Volkswagen and DRB-HICOM then ended prematurely just as both parties were on the verge of inking an MOU after DRB-HICOM was requested to step aside for Proton to start negotiations with Volkswagen. DRB-HICOM also sells Audi cars, which is owned by Volkswagen, in Malaysia, Mitsubishi vehicles and Modenas motorcycles.

It also has a stake in the local manufacture and assemble of Honda cars in the country.

*Taken from NST Online

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