Kia Motors’ partnership with Bermaz Auto (BAuto) will see the formation of a new company – Kia Malaysia Sdn Bhd (KMSB) – which will undertake local assembly (CKD) of the brand’s vehicles in Malaysia.
However, it will be some time before CKD operations can begin, according to BAuto executive chairman Datuk Seri Ben Yeoh. During a Q&A session following a media event to formalise the deal, Yeoh said it could take between 12 and 18 months before the start of CKD operations, with an investment of approximately USD20 million (around RM82.8 million) required to ready the production line.
He added that Kia models will be assembled at the Inokom plant in Kulim, Kedah, which currently has excess capacity and coincidentally BAuto has a 29% equity share in. As was confirmed in yesterday’s report, the Seltos and Carnival are two of three CKD models planned, with a third model to be determined at a later stage.
Previously, local assembly of Kia models was the responsibility of Naza Automotive Manufacturing, which is located further up north in Gurun, Kedah.
Aside from local consumption, there are also plans to have Kia cars made in Malaysia exported to nearby ASEAN countries, taking advantage of the ASEAN Free Trade Agreement (AFTA). Kia Motors is committed to ensuring KMSB becomes its regional vehicle manufacturing hub, and has a share of about 60% in the joint venture company.
During the interim period before the start of CKD production, Dinamikjaya Motors, a subsidiary of BAuto, will continue to sell “hangover stock” of Kia models from the previous distributor. Yeoh couldn’t confirm at the time if new models will be introduced this year in CBU form, noting that the company is currently focused on ensuring a proper aftersales platform is established.
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