After a period of obscurity, Kia is ready to move forward with great determination and has formulated a plan to grow its volume in the ASEAN region. Having established a new business operation in April this year, the Korean carmaker has a partner – Bermaz Auto – which took over the brand from Naza (along with Peugeot as well). Bermaz Auto and Kia have formed a joint-venture company called Kia Malaysia which will manage the brand’s activities in the country. Distribution and retail operations will be handled by Dinamikjaya Sdn Bhd, a subsidiary of Bermaz Auto.
Kia Malaysia’s operations will include local assembly, the first time the carmaker is making a direct investment for assembly operations. It considers this to be a key factor for growth as it will enable Kia vehicles to be sold around the ASEAN region at competitive prices. This is because they can be assembled in Malaysia and exported to other markets without import duties imposed by those countries, a privilege accorded by the ASEAN Free Trade Area (AFTA) agreement.
Previously, there were some Kia models assembled locally but the volume was small and therefore not efficient. Now, Kia has set a target of 100,000 units in total from 2022 to 2026. The vehicles will be for the Malaysian market as well as export. The export plans are ambitious and will account for more than 50% of annual production each year. By 2026, the company expects to export up to 19,000 units from the 30,000 units targeted for that year.
The vehicles – comprising new generations of the Carnival, Sorento, Sportage and Niro – will be assembled at the Inokom plant in Kedah. This plant, which began operations in the 1990s, assembles for brands such as Mazda, BMW and MINI. Incidentally, among the plant’s shareholder’s is Hyundai Motor Company, which is affiliated with Kia in the Hyundai Motor Group. Hyundai’s share is 15% and it has been a shareholder since the plant started in 1997.
From what Kia Malaysia has revealed of the coming products, all four models will be produced with combustion engines as well as electrified powertrains. The Carnival and Sportage will be hybrid electric while the Sorento and Niro will also have plug-in hybrid (PHEV) powertrains. A fully-electric version of the Niro will also be produced, and this would enjoy attractive incentives offered by the government for battery-electric vehicles.
ICE: Internal Combustion Engine | HEV: Hybrid Electric Vehicle | PHEV: Plug-In Hybrid Electric Vehicle | BEV: Battery Electric VehicleThe Inokom factory in Kedah which will assemble Kia vehicles. It began operations in 1997 assembling Hyundai and Renault vehicles.
Omitting passenger cars may not be a disadvantage as Kia’s past models have enjoyed limited success. Their SUVs have met with good response and the new Carnival is also a big leap from the previous generation. Now the task for Dinamikjaya will be to assure customers that it will offer the best aftersales support to those who buy a Kia. The company will examine all past promises to customers and see how to best move forward with existing owners.
Teaming up with Bermaz Auto is advantageous for Kia as the team in this company have long experience in all aspects of the auto industry. They are led by Dato’ Seri Ben Yeoh, whose career spans 5 decades, during which time he has been involved in brands like Mercedes-Benz, Toyota, Daihatsu, Proton, Mazda, Skoda and Hyundai. Senior members of his team were even involved in setting up and running the Inokom factory before it was acquired by Sime Darby Motors.
The first units of the new Peugeot 2008 have left the production line at the Stellantis manufacturing plant in Gurun, Kedah. The production is meant for the Malaysian market as well as for export to neighbouring countries. Sales will start in Thailand this month and there will also be lefthand drive versions produced for markets such as the Philippines.
“Built in ASEAN for ASEAN, we’re proud to announce that the first locally-produced new Peugeot 2008 vehicles will be on their way to customers in Southeast Asia in the coming months,” said Christophe Musy, Senior Vice-President, ASEAN & General Distributors at Stellantis.
“This is an important step in our plan to enlarge the Stellantis manufacturing footprint in the region and the first example of our ambition to expand the portfolio of Stellantis vehicles built in Southeast Asia,” said Mr. Musy.
The 2008 comes with Full LED Headlights, Peugeot’s signature 3-claws Light, the new Peugeot i-Cockpit 3D, 3D Quartz Cluster and 7-inch HD Touchscreen with Toggle Switches. It also has the latest Advanced Driver Assistance Systems (ADAS) that include Automatic Emergency Braking, Driver Attention Assist 3, and Active Blind Spot Detection + Lane Keep Assist.
Peugeot engineers have done extensive endurance and quality testing in local conditions, with up to 200,000 kms around Malaysia in the diverse local climate and environmental landscape to ensure it is suited for Southeast Asian conditions.
New Peugeot 2008.
Despite forced closure of the plant for an extended period (due to government actions to fight the pandemic), the Stellantis manufacturing team in Malaysia was able to keep to production timelines. By utilizing dynamic online tools and methodologies, they virtually collaborated with colleagues in China and Europe.
“What we’ve been able to achieve at the Gurun plant in Malaysia over the past few months is a great achievement, and we are now focused on continuing the momentum to keep up with the increased customer demand for locally-manufactured Peugeot vehicles in the region,” said Mr. Musy.
Besides the 2008, the plant in Gurun also assembles the latest Peugeot 3008 and 5008.
Stellantis (a merger between the Fiat Chrysler Automobiles and the French PSA Group) acquired the NAZA Automotive Manufacturing Sdn. Bhd. plant in October this year. Over 170 employees have returned to work and the company is working with more than 50 local suppliers with production ramping up for the remainder of 2021 to meet local demand. The plant assembles the 3008 and 5008, besides the 2008.
To know more about Peugeot models and aftersales services in Malaysia, visit www.peugeot.com.my. Peugeot owners in Malaysia are urged to provide their contact details to Bermaz Auto Alliance Sdn Bhd which is the new distributor for the brand.
In the 1970s, a company called Asia Motor was the first distributor of Mazda and Peugeot cars in Malaysia. It handled the two brands (and even assembled some models at its own plant) until the late 1980s when other companies took over each brand. Then in the early 2000s, both brands somehow ended up being taken on by the same company – Cycle & Carriage – which sold their cars till 2008. Mazda was then taken up by Bermaz while Peugeot went to Nasim Motors.
An advertisement from the 1970s when a company called Asia Motor sold both Peugeot and Mazda cars.
Now, history seems to be repeating itself as the Mazda and Peugeot brands are again being handled by the same company or rather, the same group. Late last year, Bermaz formed a new joint venture company with Berjaya Corporation known as Berjaya Auto Alliance Sdn Bhd (BAASB) which was appointed to the new role of Peugeot distributor. The BAASB name has since changed to Bermaz Auto Alliance Sdn Bhd and the company which imports the vehicles is Mega Galeri Sdn Bhd. While BAASB and Bermaz Motor are separate companies, the core people are the same and they are veterans in the auto industry.
Following its appointment, BAASB was busy setting up the new business which was interrupted by the pandemic and long lockdown period, delaying some plans. But since mid-August when the government began to relax restrictions and businesses could operate again, BAASB has been busy preparing to launch new models.
Meanwhile, in January this year, Peugeot’s parent company, Groupe PSA, had merged with the FCA Group (which has Chrysler and a number of Italian brands) to form Stellantis. While this did not really affect BAASB, it did see the change of ownership of the plant in Kedah which was originally bought over from the NAZA Group by Groupe PSA. The intention was to use the plant as a regional hub for Peugeot models and this was already underway.
Peugeot 5008Peugeot 3008
2008 to join locally-assembled range
Currently, three models are being assembled at the plant – the 3008, 5008 and 2008, the latter to be launched in the near future. With no more restrictions on gatherings and crossing borders, BAASB wasted no time organizing a media event to introduce themselves, the Stellantis people and the new 3008 and 5008 with a quick drive to Genting Highlands and back.
Both the SUVs are not new to the market, the 3008 having been introduced in second generation form in 2017, and the 5008 in 2018. However, they have received updates since their original introductions which adopt the latest design language of the carmaker. While the overall styling is unchanged, the notable differences can be seen in the front end. The grille is new with a large mass of textured elements and no frame.
The Peugeot Lion is also new and unlike previous ones, only its head is now shown (for corporate materials but the full body remains on the products). This is 11th time since the 1850s (although the original company was founded in 1810) that the brand identity and logo have been changed and the recreated emblem is said to ‘a shift in stance; a new state of mind, and a new lifestyle’. Above the Lion, on the edge of the bonnet, is the model identifier.
As their first digit indicates, the 3008 and 5008 are positioned at different levels in the market with the ‘double 00’ used for models that have a taller body structure, which means SUVs and crossovers. Comparing the two, the 3008 has a sleeker profile with bold lines whereas the 5008, being a 7-seater, is essentially an MPV but can also pass as a SUV. Both cars certainly have a premium appearance which is not unexpected of European brands.
Same engine for both models
To simplify production, both models use the same engine (for now at least) which is the same 1.6-litre THP 4-cylinder unit that came with the original introduction. Power output is 167 ps with 240 Nm of torque and the 6-speed automatic transmission is also the same one supplied by Aisin. To optimize grip on different surfaces, there are 5 modes which the driver can choose using a rotary dial.
Known as Advanced Grip Control, the system has been available in some Peugeot models since 2013 and adjusts the grip and torque to the front wheels. It helps most on very slippery surfaces when there is a need to be more sensitive with the throttle and a computer can do that better than a human foot. In most cases, drivers can probably leave it in standard mode which will be fine for most conditions.
Peugeot i-Cockpit
The highlight of the interior which Peugeot usually starts off with is the i-Cockpit. First introduced in 2012, this dashboard concept has evolved over the years and in the 3008 and 5008, it has been fully digitized. Peugeot calls the 12.3-inch digi-graphic instrument panel a ‘head-up instrument panel’ which might have people looking for the head-up display (HUD) on the windscreen ahead. However, what Peugeot’s designers have done is to position the panel in such a way that it allows the driver to keep his head up to watch the road ahead as well as still see the information on the panel.
An important contributor to the effectiveness of this arrangement is the steering wheel which is compact and flat at the top and bottom (looks like something from a racing car). It allows a clear view of the display and though compact, there is surprising ease of maneuverability. With the arms no longer needing to be so open and wide to hold the steering wheel, the actual amount of movement during maneuvers is reduced. Incidentally, for the 5008, there are also paddle shifters.
The third element of the i-Cockpit is a display in the middle of the dashboard. Resembling a tablet, this has a high-resolution full colour screen which is now 10 inches instead of 8 inches wide. It provides supplementary information and can be accessed either by touching the screen or by using the row of ‘piano keys’ below.
Connectivity is extensive with conventional cable ports, Bluetooth and Apple CarPlay/Android Auto compatibility (for Android Auto, a cable is needed and, of course, the app installed in the smartphone). Those who have the latest smartphones with wireless charging will also be pleased to find that there is a wireless charging pad added to the vehicles.
Comprehensive equipment list
With the Mazda range, the Bermaz team has always made it a point to offer the most comprehensive equipment level possible to give the best value for money. The same thinking seems to have gone into the 3008 and 5008 (available only in one version) as standard equipment includes a panoramic sunroof, handsfree powered tailgate, power adjustments for the front seats, leather upholstery, and dual zone air-conditioning.
The differences in overall length – 4670 mm for the 5008 and 4510 mm for the 3008 – are indicative of the different occupant capacity. In the case of the longer model, there is a third row of two seats which can be folded flat when not needed. While being flat when not in use is good, it does not mean that the seat is sitting right down on the boot floor with limited legroom.
The extra length of the 5008 gives it a minimum of 952 litres of boot volume, 361 litres more than the 3008. At maximum volume with the rear seats folded down, the 3008’s volume can go up to 1,670 litres while the 5008 has an expansive 2,042 litres.
As for safety, both models have been rated the maximum of 5 stars by EuroNCAP and should certainly be able to achieve the same if assessed by ASEAN NCAP. There are extensive active and passive safety systems which assist the driver but no integrated system which we are seeing in many other cars these days.
BRIEF DRIVING EXPERIENCES
We had a chance to try both models driving Genting Highlands and back to the BAASB headquarters at Glenmarie, Selangor. Although it’s been a while since being behind the wheel of these French cars, there was still a familiarity in feel that Peugeots uniquely have. It’s a feeling of stability and supple ride that you do not expect of a car that also handles well. A Peugeot engineer once suggested that it’s long experience in suspension tuning that has achieved that and something to do with damper valving.
The driving dynamics are competent and confidence-inspiring with a solid feel at all speeds. The THP engine delivers strong midrange which made for easy overtaking and the transmission’s operation was fairly unobtrusive. Between the 3008 and 5008, the smaller model felt nicer to drive with less roll and a bit more nimbleness. This could be largely due to the 100+ kg difference in weight more than the body size.
But unlike older Peugeots (and older cars in general), today’s new generation of cars have a lot of electronic systems and because electronics do not take up much space, many more features are crammed in. To use them, you need to spend a little while figuring out which button to press or how to bring up the menu on the screen.
It can be daunting at first and European manufacturers have different control approaches to the Japanese. So if you are switching from a Japanese model to a Peugeot, be prepared to have to relearn many things! But having said that, once you become familiar with all the controls, then they make driving more convenient.
The i-Cockpit layout – specifically the instrument panel – is ergonomically sound in concept but also needs a bit of getting used to as it is located differently from conventional instrument panels. The display can be configured from minimal to maximum information, depending on your preference.
One thing that is disconcerting is the tachometer and this has been the case since the first i-Cockpit. The sweep of the pointer does not follow convention, ie from left to right. Instead, for some sort of visual symmetry, it sweeps from right to left. In the early versions with traditional meter displays, it was sometimes disturbing to see the pointer somewhere at the 2 o’clock position which would usually mean you are running at high revs but actually, the revs are around 3,000 rpm.
With the latest graphic display, this is less disturbing because the calibrations are not show entirely and only a small segment before and after are shown. But as mentioned earlier, it’s a matter of getting used to this difference and after a while, an owner will be okay. For us who spend only a couple of hours with the car, that familiarity is not always achieved.
It’s the same as having signal stalks on the left side or right side and getting into a car where it is on the opposite side to what you are used to. You keep activating the wipers and curse a lot for a while but after a week or so, you no longer have that problem.
Want to buy one?
Both models are offered with a choice of three common colours (Amazonite Grey, Pearl White and Nera Black) and Cuprite Brown exclusively for the 3008, with Emerald Crystal only for the 5008. Pricing starts from RM161,616.66 for the 3008 and RM177,311.90 for 5008 without insurance. As they are both assembled in Malaysia, the government is exempting the full amount of sales tax until June 30, 2022 so you save some money.
For those who are wondering about aftersales service, we feel sure that the BAASB team will certainly be making sure that it is of the high quality appropriate to the brand. They’re giving free maintenance for the first 3 years (or maximum of 60,000 kms) as well as a 5-year warranty or maximum of 100,000 kms.
Information on showroom locations can be found at www.peugeot.com.my and if you are already owning a Peugeot, BAASB would really like to get your contact details. This will enable them to keep in touch with you and provide the aftersales support, especially if there are any technical updates available for your car.
NAZA Automotive Manufacturing, the assembly plant previously set up by the NAZA Group and then taken over by the Groupe PSA has now been acquired by Stellantis, the new company created out of the merger between the French Groupe PSA and the FCA Group in January this year. Stellantis obtained full ownership of the 17-year old plant, located in Gurun, Kedah, at the end of October.
The completed acquisition marks a significant milestone for Stellantis in southeast Asia as it has plans to invest and expand its footprint as part of a localisation strategy. “We have an ambitious growth strategy that will enable us to build on the existing production outputs in Gurun, as well as extend the breadth of brands and models within the Stellantis portfolio built in ASEAN for ASEAN. This is a very exciting proposition,” said Christophe Musy, Stellantis’ Senior Vice-President, ASEAN & General Distributors.
File photo of NAM in 2015.
“Stellantis is deeply committed to growing our presence in ASEAN, and taking full ownership and responsibility of the plant in Gurun, Kedah is a very important step towards strengthening our operations, production outputs and workforce in the region,” he added.
Updated versions of the Peugeot 3008 and 5008 are now rolling out after operations resumed recently. The SUVs are for the Malaysian market as well as for export to neighbouring countries.
Operations at the plant were suspended for over 2 months as part of the government’s effort to fight the COVID-19 pandemic, and have resumed recently. Assembly of the updated Peugeot 3008 and 5008 have been rolling out at pre-pandemic production rates, with volumes now ramping up for the remainder of 2021.
Both models are supplied to Malaysia, Thailand, the Philippines and other ASEAN markets. In the near future, the locally-assembled range will be joined by the 2008, Mr. Musy revealed. He added that, in Malaysia, they are now working with their new sold distributor, Berjaya Auto Alliance Sdn Bhd (BAASB), which was appointed last December.
The next Peugeot model to be assembled in Malaysia will be the new 2008.
“We are focused on our mission to achieve world-class manufacturing in Gurun, to build high-quality, Malaysian-produced vehicles for southeast Asia. We are working closely with our partners to increase plant capacity by almost 40% to meet demand and this, combined with our strong product plan and determination to achieve the highest standards in quality and safety, has set us up for great success in Malaysia,” he said.
The COVID-19 pandemic affected business activity all over the world, impacting sales and delaying projects. But now that the situation is easing, many activities are quickly resuming and some projects that may have been suspended can now proceed. One of them is the local assembly of Protons in Pakistan at the factory which was under construction since March 2019. Recently, the first units of the Saga began to come off the production lines, setting a new milestone for Proton.
The Saga is the first Proton model to be assembled by Al-Haj Automotive, the exclusive distributor of Proton models in Pakistan, at their new greenfield factory in Karachi. The plant, built with an initial investment of US$20 million (about RM83.1 million), will create 2,000 direct employment opportunities in its first three years of operations. It is estimated that a further 20,000 indirect jobs will also be created as a result of the new plant being established.
25,000 units a year
The initial capacity of 25,000 units a year is expected to meet the potential sales volume of the market which was about 128,000 units in 2020 but higher at around 193,000 units the year before the pandemic affected the country. As with the case in Malaysia, local assembly means that the retail prices can be lower due to more favourable taxation, a critical element in Proton’s aim to grow exports in the future.
Speaking during the roll-out ceremony, Hilal Khan Alfridi, Chief Executive Officer of Al-Haj Automotive said: “The successful assembly of the Proton Saga in Pakistan is the culmination of the hard-work and untiring efforts of Proton, the entire Al-Haj team, its suppliers and vendors. Even with COVID-19 restrictions in place, we continued to push to build our new assembly plant and as such, we are confident it will set new industry standards and enable us to introduce more products that meet the international quality levels set by Proton.”
X70 assembly to follow
The X70 SUV is to be second model assembled in Pakistan. Launched in December 2020 as an imported CBU model, the X70 met with positive response. Together with the final batch, the total number exported to Pakistan is 602 units. The first locally-assembled units are expected to be available by the end of this year.
The President of Pakistan viewing one of the first locally-assembled Proton cars.
“Despite COVID-19 severely affecting our project timelines in Pakistan, demand for Proton models in the country remains high for both the Proton Saga and Proton X70 attracting a strong following. Al-Haj has received 2,500 orders for the Saga and over 2,000 orders have been placed for the X70, so we wish to thank the customers for their belief in our products and especially their patience and understanding over the delays in receiving their cars,” said Roslan Abdullah, CEO of Proton Edar.
“Now that the final shipment is on the way and local assembly has started for the Saga with the X70 to roll off the production line before the end of the year, we can finally work to catch up to market demand. This will allow Al-Haj Automotive and Proton to establish a strong market presence in the country to benefit future sales growth,” he added.
Final shipment of Proton X70s from Malaysia to Pakistan.
Sharing assembly expertise
With export sales being one of the pillars to achieving its long-term goals, Proton’s commitment to the Pakistan market extends beyond the shipment of CKD packs and consumable parts. It also includes human resources and there are currently 20 Proton staff specialising in various manufacturing related fields stationed in Karachi to assist in assembly operations.
“After 37 years of vehicle assembly experience, Proton has accumulated a wealth of in-house expertise that can be shared with our overseas partner. Having operated in various market conditions, we can quickly adapt to different scenarios, so we hope to be able to play a major role in ensuring the success of the brand in Pakistan,” Encik Roslan said.
As reported earlier, Porsche will be setting up assembly operations in Malaysia, the first time the sportscar maker has produced its cars outside Germany. The company has confirmed that small-scale local assembly operation in Malaysia will join the company’s two other production sites – the original one at Zuffenhausen and the 19-year old one in Leipzig.
It is believed that the plan to assemble in Malaysia has been under consideration for at least 5 years though it was only early this year that it became known outside the company. There is interest in the Southeast Asian region which is unified under the ASEAN Free Trade Area (AFTA) and member nations have agreed to allow intra-ASEAN exchange of goods and service without import duties. The agreement was signed in the early 1990s and was implemented in the early 2000s.
Carmakers have welcomed the AFTA agreement which allows them to set up a large factory with big volumes in one country to make vehicles for the region. This allows good economies of scale compared to the situation before where each country had low-volume assembly plants to cater only for the domestic market. The regional approach lowers production costs which benefits consumers who get lower prices or better features with the money saved.
Porsche would have likewise seen a similar opportunity, especially since Volkswagen began assembly in Malaysia. However, the initial plan is to assemble in Malaysia from 2022 for the local market only but it’s almost certain that there will be exports later on. This will enable pricing of some models to be more attractive and competitive as they will not be subject to the high import duties that the countries impose for vehicles originating from outside ASEAN.
Sime Darby to be local partner
Not surprisingly, Porsche will have Sime Darby Berhad as its partner in local assembly. Sime Darby Auto Performance, a subsidiary of Sime Darby, also handles the Porsche brand in Malaysia and another subsidiary, Inokom, has an assembly plant in Kedah. Some of the brands assembled at the plant, which began operations in the 1990s, are BMW, MINI, Mazda and Hyundai. BMW engine assembly is also carried out by a subsidiary adjacent to the plant.
The Inokom factory in Kedah.Mazda is among the brands that has assembly operations at the Inokom plant.BMW also has engine assembly operations at a facility adjacent to the plant where some of its models are assembled.
First Porsche production facility outside Germany
The local assembly operation will not only be something special for Malaysia but also for Porsche as it has never before had to have a CKD (completely knocked-down) process which is required for assembly overseas. It is not just a matter of picking a model and putting it into a box in disassembled form for assembly in another country. The model has also to be engineered for local assembly, taking into account the level of automation at the facility and capabilities of the workforce.
It is possible that the ‘SKD’ (semi knocked down) approach will be taken initially although this approach was stopped by the government in mid-2019. With SKD, bodyshells can be imported already welded together and in some cases, even painted. One thing that will prevent Porsche from exporting from Malaysia initially will be the requirement of 40% ASEAN content in each vehicle in order to qualify for the duty-free privilege. This usually takes while as suppliers have to be found or if they are new, then they will need time to also establish their operations.
Porsche will have Sime Darby as its partner in the local assembly operations and the two companies are already familiar with each other as Sime Darby Auto Performance, a subsidiary, handles the German sportscar brand in Malaysia.
Willing to learn and adapt
“We’re fortunate that, due to careful planning, our existing factories are more than up to the task of meeting current and future global demand for our cars,” said Albrecht Reimold, Member of the Executive Board for Production and Logistics at Porsche. “However, the new assembly site in Malaysia meets specific market needs and, although a standalone project and modest in size and capacity, it signals our willingness to learn and adapt to specific local market conditions.”
“Malaysia and the whole ASEAN is a region of great potential, and we look forward to the first locally assembled models reaching our Malaysian customers next year,” added Detlev von Platen, Member of the Executive Board for Sales and Marketing at Porsche. “As Porsche is moving into a new era of mobility, Malaysia and the ASEAN region are gaining an increasing importance. This step now is part of a long-standing initiative to keep pace with rapidly evolving customer and market demands.”
It used to be that only models that could sell in sufficiently large volumes would be assembled locally, limiting the number of models that could enjoy preferential taxation policies. With BMW Group Malaysia, that meant just the 3-Series and 5-Series, with the 7-Series having been assembled briefly. But it’s different these days as the company keeps widening its BMW and MINI range of models assembled locally each year at its facility in Kedah.
The latest to be added is the X7 xDrive40i Pure Excellence, which is the model that the top of the SAV (Sports Activity Vehicle) range. According to Hans de Visser, BMW Group Malaysia’s new Managing Director, this move to localise the assembly of one of our largest models in the BMW X range further demonstrates the company’s longstanding confidence in Malaysia’s potential as a regional hub for the luxury automobile segment.
“We are proud to be redefining the ‘Story of Progressive Luxury’ with a new addition to our portfolio of locally-assembled vehicles in Malaysia. The new model is also a testament to our commitment in the local market, as we further innovate our fleet of premium Sports Activity Vehicles to complement the most luxurious of lifestyles in Malaysia,” said Mr. de Visser.
Similar looks as CBU model
The locally-assembled X7 has a similar appearance to the model that was introduced two years ago, with the kidney grille creating a strong presence with its massive size. The massiveness is contrasted by slender BMW Laserlight headlights that can give strong illumination up to 600 metres ahead.
With an overall length of 5.1 metres and overall width of 2 metres, the X7 is a really big vehicle with an obviously spacious cabin containing three rows of seats. As a flagship variant, it features the opulent ‘Crafted Clarity’ handmade diamond-cut trim element and a range of standard equipment including a sport leather steering wheel and electrically adjustable comfort seats.
Large instrument panel with HUD
The BMW Live Cockpit Professional, which runs on the BMW Operating System 7.0, combines the fully digital, user-configurable 12.3-inch instrument cluster with an equally large central Control Display with touchscreen functionality. The most important information the driver would need while in motion is also projected on the windscreen by the Head-Up Display. And to minimise taking the hands away from the steering wheel, there’s the voice-controlled BMW Intelligent Personal Assistant and BMW Gesture Control.
Other highlights of the X7 include the Welcome Light Carpet feature, 5-zone air conditioning, a Harman Kardon Surround Sound System with 16 loudspeakers, and electric roller blinds for each window. The Rear Entertainment Professional system is also available while the spaciousness is further enhanced by the large panoramic sunroof complemented by large windows.
While the doors feature a soft-close, the tailgate is powered to open and close on its own without the owner having to even touch the door. When open, there’s easy access to a variable-volume luggage compartment with up to 2,120 litres available with the backrests folded down.
Those who have an iPhone can make use of the BMW Digital Key which not only locks/unlock the doors but can also program certain vehicle functions with limitations, in the event it is driven by someone other than the owner. There’s also wireless charging for compatible mobilephones as well as smartphone connectivity.
3-litre TwinPower Turbo engine
Under the long bonnet is a 3-litre 6-cylinder petrol engine which can produce up to 340 bhp/450 Nm. With an 8-speed Steptronic Sport transmission, the 2,320 kg SAV can get from 0 to 100 km/h in a claimed 6.1 seconds. Fuel consumption at its best is said to be 10.5 kms/litre which means a full 83-litre tank should give a range of almost 900 kms.
The xDrive badge means all four wheels are powered, not just for off-road driving but also to maximise traction, agility and handling stability (especially on slippery surfaces). Additionally, there is Dynamic Stability Control which takes note of the load on board as registered by the air suspension sensors and factors this data into braking modulation for optimum stopping performance. Executive Drive Pro with active roll stabilisation is included as standard.
Assisting the driver
The X7 driver can enjoy the drive while electronic systems help make mundane tasks easier. For example, the Reversing Assistant assists in safely manoeuvring out of a tight parking space, while the Driving Assistant has a comprehensive range of functions to help avoid accidents. The Active Cruise Control varies cruising speed to maintain a safe gap with other vehicles and can operate right down to standstill.
The X7 xDrive40i Pure Excellence will be in the showrooms from this weekend and if you already know you want one and it’s just a matter of choosing the colour, here are the exterior/interior choices available: Black Sapphire and Sophisto Grey exterior with Cognac Leather Vernasca upholstery; Phytonic Blue and Manhattan Metallic exteriors with all-Black design-perforated Leather Vernasca interior; and Leather Vernasca in Coffee with Black design perforations exclusively with the Mineral White exterior finish.
Monthly instalments from RM7,468
Priced from RM673,323.61 (excluding insurance), booking can be done via BMW Shop Online with just RM5,000 but due to a scheduled website maintenance at this time, the facility will only be from May 11, 2021 onwards. Those who use BMW Group Financial Services Malaysia can choose from various financing packages with monthly instalment plans starting from RM7,468 (terms and conditions apply).
Porsche to assemble in Malaysia? That’s the current topic among enthusiasts following a report in The Edge Weekly. The business website mentions that its source has said the investment has been approved by Malaysian authorities and that the assembly will be done at the Inokom factory in Kedah.
It would be quite an unusual development for the German sportscar maker as it has never built its cars outside Germany. It has two factories – the original one at Zuffenhausen and the 19-year old one in Leipzig. In its 2019 financial year, total production from the two factories was almost 275,000 vehicles.
Porsche has come a long way from the time it began making sportscars in the 1950s. Today, it has two factories supplying to the whole world – the original one from the 1950s in Zuffenhausen (below) and a second one in Leipzig (bottom), both in Germany.Porsche builds its vehicles for the whole world at just two facrories – the original one from rhe 1950s in Zuffenhausen and a second one in Leipzig (below), both in Germany.
Porsche being a strong brand, demand for its products has always been good although the coronavirus pandemic which impacted the auto industry did result in a 12% decline in deliveries last year. In the first half of 2020, Porsche sold 55,550 vehicles to customers in the Asia-Pacific, Africa and the Middle East regions, with China’s intake of 39,603 units making it the biggest single market worldwide for the carmaker.
So is it time for Porsche to establish a production hub in the Asia-Pacific region? Bear in mind that the 100,000+ volume is made up of 5 model lines with the specialized all-electric Taycan being the sixth. Obviously, assembling outside Germany would not involve all the models so it would be one or two, with the Cayenne being the most popular so it could be a good candidate.
Manufacturers invest in overseas production facilities in places where they can get good incentives by government to do so. They obviously require a good infrastructure as well. At one time, the potential domestic market volume was important since they would assemble in another country and primarily want to sell there, with exports being secondary. However, with the formation of the ASEAN Free Trade Area (AFTA) as a single trading bloc and duty-free exchange of goods, it is no longer just one country to look at but the potential of regional volume, which can be quite big.
Local assembly of vehicles in Malaysia began in 1967.
Up till the 1980s, Malaysia was an excellent place for any carmaker to have a production base. It had a good infrastructure, a well educated workforce which was also familiar with the English language, a stable government and a growing economy. It had begun local assembly activities in 1967 so a broad range of locally-made components was available. Manufacturers who chose to assemble locally had their vehicles taxed at lower rates so they could be priced attractively.
However, things changed after the mid-1980s when Malaysia decided to have its own National Car, with the government being an investor in the project. Naturally, it had protection so it could compete against established brands and with the protection, the playing field was no longer level like before. The market came to be dominated by one brand while others had to fight in a far smaller slice of the market.
In the interests of ‘free trade’ and also as a member of the World Trade Organisation, the government never stopped anyone else from selling in Malaysia. They were welcome to import their vehicles in CBU (completely built-up) form and pay much higher taxes, or assemble them locally and have lower taxes but still more than what Proton had to pay.
While having a national car, the government nevertheless wanted to also make Malaysia a production hub in ASEAN. However, it basically wanted carmakers to build their factories in Malaysia but export almost all the production; the domestic market was to be left alone. While this may be fine in theory, as mentioned earlier, manufacturers prefer to look at the domestic market first. If they are to export to another country, why can’t they do it from their own factories in Japan or Europe? The shipping costs would be the same anyway and they would probably have lower production costs as well as the vehicles would be made in high-volume factories with better economies of scale.
The AFTA agreement helped but Malaysia has so far not benefitted much. When the manufacturers first learnt of the single market being formed, and the ability to export around the region without import tax, they were attracted. The market size estimated when AFTA was signed in the early 1990s was about 550 million consumers, with many steadily moving upward economically, and a potential GDP of US$750 billion.
So they looked at making investments and besides incentives, they also looked at domestic market potential. Malaysia was seen as ‘protected’ so it was not seriously considered, not that the government really cared since Proton was selling everything it could make anyway. So Thailand, where the playing field was seen as level, got big chunks of investment as Ford and GM built brand new factories to make their products for the region. Indonesia too saw investments with the aim of expanding existing factories to produce more and export.
Ford did consider Malaysia and had a plan to make the Escape SUV in Malaysia for the region. The plans were confirmed but then Malaysia decided that it did not want to open up as planned under the AFTA agreement because it said that its auto industry had been battered by the Asian financial crisis. It needed some extra years to recover, so the market had to stay closed. A frustrated Ford, realizing that it would not be practical to use Malaysia, tore up its plans and put its money into the Philippines where it had a factory.
Only Volvo seems to have chosen Malaysia as a hub of sorts but that is more a historical thing. Its factory here was the first to open when Malaysia began calling for local assembly and although it had production in Thailand, that was closed down and everything concentrated in this country for the region from 2012.
For the other carmakers, Malaysia was still and attractive market because it was the largest passenger car market in ASEAN. Thailand was a pick-up truck market and in Indonesia, the biggest demand was for MPVs. So in spite of the difficult environment, many carmakers continued to operate in Malaysia, make the necessary investments periodically to upgrade their plants and kept refreshing their model lines.
Porsche has been officially in Malaysia for a long time, with Sime Darby Auto Performance representing the brand since 2010.
But the much desired objective of the government – to be a regional production hub – remained elusive. There have been a few National Auto Policies (NAP), each one stating that aim, and offering various types of incentives without much detail. The general way that the Malaysian government’s Ministry of International Trade & Industry has liked to operate is with ‘customised’ incentives, perhaps believing that the approach would be more appreciated by investors.
However, many in the industry have expressed a dislike for the approach, preferring the details to be open for all to know and work with. Transparency is important for these businessmen, and as one veteran industry executive said, “How can I know that my competitor might have received a better incentive but actually invested less?”. So the has remained an indifference and even with the latest NAP announced a year ago, the lack of transparency and detail continued. Many people were disappointed that only an outline was provided and could not even begin to start working out plans to propose to their head office. Anyway, since then, the government has changed so it could be that the NAP will see a revised form, depending on the MITI minister.
For many years. Daihatsu has been taking the Myvi made in Malaysia and selling it as a Daihatsu Sirion in Indonesia. Mazda has also been exporting the CX-5 assembled in Malaysia (below) to Thailand.
Over the past decade, some companies have tried to export from Malaysia with limited success. Perhaps only Volvo and Mazda (with the CX-5) have been doing well with exports but Toyota started and stopped exporting its Malaysian-made Hiace to Thailand. Proton and Perodua export, of course, and of note is the fact that the Myvi made in Malaysia is taken by Daihatsu for sale in Indonesia as a Sirion under its own brand. That says a lot about Perodua’s quality as a Japanese carmaker would not simply use a product made by someone else.
Porsche and Sime Darby
The report by The Edge Weekly mentions that Porsche will use the Inokom plant in Kedah, which is not surprising. The plant, opened in the late 1990s, is owned by Sime Darby and a unit of the company is also the importer and distributor of the German sportscars. It would make things a lot easier for the same parties to also work together on an assembly project.
If Porsche is indeed going to do it, then it will not just be an assembly program to set up. The carmaker has not done completely knocked-down (CKD) activities before so it will have to set up a new department just for it. Perhaps, being in the Volkswagen Group, it will be able to get assistance from its colleagues in Wolfsburg as there is local assembly of some Volkswagen models being done in Pahang.
The Inokom factory in Kedah which assembles vehicles from the BMW, Hyundai, MINI and Mazda brands.
It is not just a matter of picking a model and putting it into a box in disassembled form for assembly in another country. The model has also to be engineered for local assembly, taking into account the level of automation and capabilities of the workforce. This is often the case with picking models for overseas assembly. Volvo had to first invest in laser welding equipment before it could consider assembling the XC60 in Malaysia.
The two Porsche factories in Germany are very advanced with manufacturing processes that ensure high quality. It is unlikely that all the manufacturing processes at Inokom will be identically advanced, so some modification may be needed, and that means an engineering program to develop a ‘Malaysian CKD model’.
It is possible that the ‘SKD’ (semi knocked down) approach will be taken although this approach was stopped by the government in mid-2019. With SKD, bodyshells can be imported already welded together. While the government no longer allows SKD, one never knows with a ‘customized incentive’ and also, the government of today is not the same one that formulated the 2020 NAP.
The Cayenne SUV would be a good candidate for assembly as it is popular throughout the region.
Righthand drive or lefthand drive? This is also another issue, especially if the volume is not going to be very big. What some carmakers have considered – Geely and Great Wall Motors being among them – is that a production hub in ASEAN could be dedicated to righthand drive (RHD) versions which they do not make in their own country. This is more applicable to the Chinese carmakers though as the other global players have long coped with making cars with the steering wheel on either side. So Malaysia could be designated to make RHD models for most of the ASEAN markets and when volumes get higher, then they can also consider LHD.
As for quality, there is nothing inferior about Malaysian assembled vehicles today. The manufacturers have many processes that ensure the quality standards are very high, even if they might not be exactly similar to those of factories in Japan or Germany.
The only thing is consumer perception even though one can say that in this era of globalization, people don’t really care as long as the quality is not poorer. Many years ago, when Proton was assembling the Lotus Elise and tried to export it to Japan, the customers there indicated that if they wanted to buy a Lotus, it had to be made in England. Likewise, when Mazda and Toyota wanted to source some of its models from Thailand for its ASEAN markets, customers in Singapore did not want them and wanted to have cars from the Japanese factories.
Finally, the price – which is often the first thing Malaysians think of when they hear that a model will be assembled locally. For a long time, they have been conditioned to expect that a model that is assembled in Malaysia will be cheaper and that is because there is a lower tax rate and in more recent times, the government also rewards those who make investments with subsidies that can offset production costs to allow lower retail prices. So yes, a locally-assembled Porsche could be cheaper though probably not by a huge amount.
‘CKD’ is something which car-buyers may read about and some may wonder what it means. The initials stand for ‘Complete Knocked Down’ and refer to the way a vehicle is shipped to Malaysia. If it comes in a completed form, ready to be driven, then it is referred to as ‘Completely Built Up’ or ‘CBU’. If it comes in a disassembled form with many parts in boxes, and the parts are then assembled to form the vehicle, then it is a CKD model.
The concept of CKD began many decades ago when manufacturers wanted to be able to produce more vehicles for a market. Sometimes shipping vehicles in CBU form was not practical or feasible, or restrictive regulations made it difficult to sell CBU models. So vehicles were sent in parts in a box – like a Tamiya model – which could then be assembled in another country. The investment was lower than to build a factory and governments also liked it because there would be employment and transfer of technology.
Workers packing parts for the Beetle in 1955. More vehicles can be sent in CKD form than CBU form.
Assembly in Malaysia started in 1960s
In fact, in the mid-1960s, the Malaysian government decided to encourage the assembly of vehicles locally as a means to industrialize and also create more jobs, as well as benefit from transfer of technology. While it would have wished that factories could be built, the market size was too small, so the first step was an assembly plant and as an incentive, the tax rates for models assembled in Malaysia would be lower than for CBU models.
A number of manufacturers responded positively, especially as Malaysia then was a very good place for a carmaker to carry out such activities. It was developing rapidly, had a stable economy and society and the workforce was also well educated. Additionally, more vehicles can be sent in CKD than CBU form.
CKD packs are put into containers and then shipped by land, air, sea or rail to countries around the world.
The first assembly plants were opened in the second half of the 1960s, mostly situated in Shah Alam. Selangor. Carmakers in Europe, Japan and Australia began sending over CKD packs for their models to be assembled locally. To encourage the development of a local auto industry, the government also specified a list of parts which should be sourced locally. These were things like paint, windscreen glass, tyres, batteries and wire harnesses.
Volkswagen was one of the early carmakers to assemble its cars in Malaysia, starting with the Beetle. In fact, the German company had been exporting the Beetle in CKD form since 1950. In Malaysia, the packs which arrived in Port Klang were sent to the Assembly Services plant in Shah Alam. This plant was huge in its early days and assembled a variety of models from different brands as well as large commercial vehicles. With a CKD operation in place, Malaysia was added to Volkswagen global production network.
The CKD packs are usually wooden boxes and contain a number of parts, big and small, which are then transferred to the assembly line within the HICOM Automotive Manufacturers complex.
How the process works
The CKD process is slightly different from the CBU one which is pretty much just ordering whole vehicles with the required specifications. With CKD, thousands of parts must be collected and in the case of Volkswagen, the coordination is done at Wolfsburg, its home city in Germany. Orders received from all over the world are processed centrally in Wolfsburg and a supply management team ensures that the parts required are available from the different European plants and suppliers.
The source for the type of item will be different; body panels and engines, for example, may come from Volkswagen’s own factories but parts like instrument panels and seats might be from suppliers. The parts used to be packed in the boxes manually, but high-tech systems are now used. The parts are bundled and packaged at one of the 8 distribution centres, loaded into containers and shipped by sea, rail or air to the different countries.
These 8 centres handle a total of about 1.7 million cubic metres of goods every year, corresponding to about 25,000 overseas containers. From the receipt of an order, it takes about 8 weeks before the CKD packs for a vehicle is delivered in the destination country. All in all, about 90 different vehicle projects of overseas plants are supplied via CKD from Europe.
Today, Volkswagen has 27 assembly locations in 10 countries. The largest CKD assembly plant is located in South Africa and it not only serves that market but some of its output is also exported to other countries. So it is also a production hub for certain models.
A Volkswagen Polo being assembled at the plant in Pekan, Pahang.
Quality assured even with local assembly
There are also plants located in the USA, China, Brazil, Argentina, India, Malaysia and Indonesia. In some cases, the assembly may be carried out by a local business partner. In Malaysia, Volkswagen works with HICOM Automotive Manufacturers which has a manufacturing complex in Pekan, Pahang. Of course, quality is assured as Volkswagen personnel are also present to assist and conduct inspections on every vehicle.
“We used to need only one or two faxes per week for coordination with the overseas plants. Nowadays, we work with our production plants on a real-time basis and manage about 9,000 part numbers for worldwide shipment. The tasks of our employees have changed fundamentally – they are no longer simply box-packers but are now logistics data experts,” noted Burkhard Husken, Head of CKD of the Volkswagen Passenger Cars brand.
Those who have booked a Mitsubishi XPANDER can expect their new 7-seater crossover soon. The first units have been completed and will soon be leaving the plant at HICOM Automotive Manufacturers Sdn Bhd in Pekan, Pahang. Malaysia is the third country to locally-assemble the XPANDER, following Indonesia and Vietnam.
The plant location would be familiar to Mitsubishi Motors as the Pajero (and earlier models of Mitsubishi pick-ups and vans) used to be assembled there in the 1990s. Mitsubishi Motors Malaysia (MMM) has its own dedicated area for assembling the XPANDER at a rate of 6,000 units annually.
MMM invested in setting up an all-new Body Shop, Painting Jigs and Tester Line at the plant. The Paint Shop is said to be one of the most advanced in ASEAN. Complete immersion and coverage with protective primer paint is achieved during the Electro-Deposition (ED) process with the 360-degree rotation of the vehicle in the tank. Conventional ED processes usually just dip the body at one orientation.
Robots are used for consistent application of multiple coats of paint to ensure a high quality finish. To ensure that the XPANDERs assembled in Malaysia meet the high standards set by Mitsubishi Motors, there are auditors from the Japanese manufacturer who constantly carry out checks.
“We ensure all our customers that each unit of the XPANDER undergoes extensive quality control tests before it is shipped out. Every inch is checked by human-eyes and cutting-edge technology,” said the CEO of Mitsubishi Motors Malaysia, Tomoyuki Shinnishi.
Mr. Shinnishi said that the XPANDER is being assembled locally to achieve a more competitive and attractive price, with better specifications providing customers more convenience and comfort. “The XPANDER is a significant model for MMM and we are confident that it will be a favourite among many Malaysians,” he added.
Since its launch in Indonesia, some 270,000 units of the XPANDER (including the XPANDER Cross variant) have been sold across ASEAN. It will be in showrooms next month and come with a 1.5-litre MIVEC engine. Pricing has not been revealed but is expected to be under RM100,000. Visit www.mitsubishi-motors.com.my to locate a showroom to view and test-drive the XPANDER and other Mitsubishi models.
Besides the XPANDER, MMM also assembles two SUV models in Malaysia – the Outlander and ASX – at the Tan Chong plant in Kuala Lumpur. Its most popular model, the Triton, is imported from Thailand in CBU form.
