Malaysia is setting its sights on sustainable aerospace manufacturing, seeking collaboration with aerospace giant Boeing to leverage advanced technologies and practices. Tengku Zafrul Aziz, Malaysia’s investment, trade, and industry minister, highlighted the need for swift action to reduce greenhouse gas emissions. The collaboration with Boeing is seen as a crucial step towards accelerating sustainable manufacturing in the country’s aerospace industry.
In an effort to expedite the adoption of sustainable manufacturing practices, Malaysia is reaching out to global partners like Boeing, aiming to foster the rapid institutionalisation of these practices. Minister Tengku Zafrul stressed the urgency to act swiftly, underlining the global imperative to reduce greenhouse gases. He emphasised that both speed and scale are essential to drive the integration of sustainable manufacturing practices.
Malaysia is seeking increased incentives and allocations for its aerospace industry in the 2024 Budget. Minister Tengku Zafrul expressed hope for additional support, complementing the New Industrial Master Plan (NIMP) 2030 and Malaysian Aerospace Blueprint 2030. These initiatives are aimed at positioning Malaysia as a prominent aerospace hub in Southeast Asia and a crucial part of the global aerospace supply chain by 2030.
When local production of motor vehicles in Malaysia started in 1967, the vehicles were assembled from parts imported from factories in other countries. The parts came in what are known as completely knocked-down (CKD) packs – just like a Tamiya scale model – and were assembled in the factory.
Some parts – like seatbelts, windscreen glass, tyres and wire harnesses – were supplied by local companies that were established but the larger parts like bodyshells and engines still came from overseas. It was not feasible in the early years to produce the body parts which required huge and expensive presses to stamp the steel panels. These required larger volumes than what the local car market had in the 1960s and 1970s.
When the Malaysian National Car project was started, the idea was to boost volume and with economies of scale, stamping of body panels could be done. This was one of the major investments Proton made in 1984 and it was the first company to make its own body panels for the Proton Saga.
For many decades, when writing about Rolls-Royce cars, motoring journalists would mention Crewe, the location in England where they were made since 1946. However, Crewe’s association with Rolls-Royce would cease (and become associated with Bentley) after 2002 when the BMW Group acquired full ownership of all elements of the Rolls-Royce brand in 2003.
This development meant that BMW had to provide Rolls-Royce with a new home, certainly in England, and a brand new factory was built at Goodwood in Sussex with an initial investment of £65 million. The site was meaningful as it was just about 15 kms from where the company’s co-founder, Sir Henry Royce, lived and worked for the last 16 years of his long and illustrious life.
The Zhejiang Geely Holding Group – more commonly referred to as Geely – is relatively young in the global auto industry, having been established in 1986. Yet over the past decade, it has acquired several well-known international automotive brands and formed alliances or partnerships with others. Its business today spans the automotive value chain, from research, development and design to production, sales and servicing.
The latest partnership announced today is with Renault SA where a 50-50 joint venture will be formed for producing petrol engines and developing hybrid technology that will be used by each company’s brands, and possibly supplied to others.
Proton has long had its own engine factory, with the first one having been opened in the Glenmarie industrial estate of Selangor in the 1990s. Over the years, this factory has provided millions of engines for various Proton models and continues to do so.
Now, with the new generation of engines in the carmaker’s latest models, it is time to have a new facility to assemble the 1.5-litre TGDI (Turbo Gasoline Direct Injection) JLH-3G15TD 3-cylinder engine used in the X50 and X70 models. This is the first time the engine is being assembled outside China at is one of the most advanced automotive engine assembly lines in the country at the Proton Tanjung Malim manufacturing complex in Perak.
Located within the Engine and Powertrain facility, the assembly line covers an area of 18,000 sq. metres and has a current maximum capacity of 180,000 engines when running on three shifts. The new facility is also part of the RM1.8 billion Proton is making to upgrade its facilities at Tanjung Malim, also known as Proton City.
Award-winning engine
The award-winning JLH-3G15TD engine is used not only by Proton but also by other brands in the diverse Geely Group. When the many other models are included, over 750,000 vehicles sold globally are now powered by this engine.
The engine, the result of a project which started about 10 years ago, follows industry trends of downsizing to gain better fuel efficiency and also reduce undesirable exhaust emissions. While downsizing the displacement on its own has meant lower power output, this is not the case with the JLH-3G15TD. In fact, in spite of its smaller displacement and one cylinder less, its output is actually comparable to much bigger engines with 130 kW and 255 Nm.
This has been possible with advanced technologies, 4 valves per cylinder, dual variable valve timing, optimised thermal and lubrication systems, a low inertia turbocharger, and homogenised 200-bar direct fuel injection system. It is also capable of meeting Euro 6 requirements.
Localisation of parts
As a Malaysian carmaker, Proton has always prioritised localisation and where possible, it has sourced parts from Malaysian suppliers, although in the era of globalisation, there are also some suppliers from other countries in the region. For this new engine, there are currently 72 parts supplied by 19 Malaysian and 4 ASEAN vendors.
The company is also using the new assembly line to advance its human capital development goals, with 202 workers directly employed to work there. With an average age of just 24 years, they represent the next generation of skilled automotive manpower for the nation.
“Proton’s new engine assembly line showcases the company keeping its promises to its stakeholders. When the agreement was made to partner with Geely in 2017, one of our commitments was to invest in Malaysia’s automotive industry both financially and through the introduction of new high technology components. The new assembly line does this while also giving PROTON an avenue to attract and develop young talents who will help drive the automotive industry and the company into the future,” said Roslan Abdullah, Deputy CEO of Proton.
A closer look at the facility
Featuring 88 stations consisting of 17 automatic, 15 semi-automatic and 56 manual stations, the high-tech assembly line was built using an IR 4.0 ethos applying a high level of automation to boost productivity. A climate-controlled clean environment with an anti-static station to allow for the discharge of static electricity protects the electronic components used, while the assembly line utilises a conveyor system. This is not only smoother but is also cleaner, more durable and less costly to operate than one that uses a chain.
All workers on the assembly line have undergone extensive training with Geely as well as the suppliers of the machines used. The equipment comes from well known suppliers such as ABB, COMAU, FEV China, FEV India, WiBeda and Hangxin.
The Internet of Things (IOT) technology is deployed in the form of intensive data capture and analytical tools to ensure that the quality meets the standards required and are maintained. Additionally, 207 Error Mistake Proofing (EMP) controls and 34 intelligent high-resolution cameras have been installed on the line to prevent process and assembly defects and reduce downtime with 100% real-time defect detection capabilities.
“Quality is the main priority at our new engine assembly line. We know we need to show Malaysians that Proton is capable of building reliable high-quality products, so we have left nothing to chance. Aside from the quality monitoring measures deployed on the assembly line, we also work closely with our counterparts at Geely to trouble shoot issues and share best practices in our efforts to produce a world-class engine,” added Encik Roslan Abdullah.
America has always had an attractive car market which was once the largest in the world. Though overtaken by China in 2009, the US market is still huge and has averaged 17 million units annually over the past few years. Many brands are present in the market and competition is tough, besides the fact that emission and safety regulations are also stringent.
Nevertheless, Vietnam’s Vinfast intends to enter the market and its ambitious plans are not only to sell SUVs there but also make them in the country. After looking at incentives offered by various states, it settled on North Carolina to build its factory with an initial investment of US$2 billion. It is the state’s first vehicle manufacturing plant and the largest economic development announcement in North Carolina’s history. VinFast’s project is estimated to grow the state’s economy by at least US$71.59 billion over the next 32 years,
The factory, on an 800-hectare site, will have an annual capacity of 150,000 vehicles and start rolling them out from the second half of 2024. Besides SUVs, the factory will also make EV battery packs and electric buses.
“Having a production facility right in the market will help VinFast to proactively manage its supply chain, maintain stabilized prices and shorten product supply time, making VinFast’s EVs more accessible to customers, contributing to the realization of local environmental improvement goals,” said Le Thi Thu Thuy, VinFast Global CEO and Vice Chair of the Vingroup. The Vingroup was founded by Pham Nhat Vuong, Vietnam’s first billionaire and its richest person.
The US factory will be Vinfast’s third production site following the first one in Haiphong, Vietnam. It also acquired a GM factory in Hanoi as well as GM’s proving grounds in Australia. However, it decided to later sell off the proving grounds.
For its US business, Vinfast plans to spend $200+ million for a headquarters in Los Angeles and set up a network of more than 60 outlets with aftersales centres this year.
The 5-year old carmaker currently has 2 fully electric SUVs, the VF8 and VF9 (previously known as VF e35 and VF e36), which were styled by Pininfarina. The smaller VF8 has 2-wheel drive and all-wheel drive with one or two electric motors and a 90 kWh battery claimed to give 500 kms of range. The larger VF9 has three rows of seats and dual motors for all wheel drive. The battery pack has a capacity of 106 kWh which is claimed to be good for around 482 kms of cruising range.
Like other Asian brands that entered the US market, it’s a gamble that Vinfast is taking, especially as it is so new. However, its lack of reputation may also work as people will not have preconceived notions about the brand and may assume that being Asian, it will have the sort of quality and reliability for which Japanese products have long been known. Being ‘Made-in-America’ may also be helpful in gaining acceptance but ultimately, Vinfast will still have to fight for its place in the market against other established brands.
At different periods, manufacturers have different strategies which require investments in different parts of the world. In the 1990s, Ford decided that it must ‘control its own destiny’ in the ASEAN region and was attracted by the ASEAN Free Trade Area (AFTA). This would be a single trading region and those who made their products in any country in the region could export to another ASEAN country with no import duties imposed. For a mass producer like Ford (and the company was the one that introduced mass production to the auto industry), this was ideal as it meant that a mega-factory could be set up in one country to supply to other countries. Great for cost efficiencies which would also mean more competitive prices in the markets.
So Ford invested US$500 million (RM2.107 billion) to establish a brand new factory in Rayong, on the Eastern Seaboard of Thailand. The factory, called Auto Alliance Thailand (AAT), was a joint-venture with Mazda, which was then an affiliate. Its main product would be the new Ford Ranger truck and Mazda equivalent, the BT-50, with the Everest SUV being added later. Besides supplying the Asian market, the factory also supplied to other global markets which was helpful during the regional downturn when the Asian Financial Crisis hit.
17 years after AAT began operations, Ford set up another factory in the same area with an investment of US$450 million (about RM1.9 billion) and it was wholly owned by the carmaker. Known as Ford Thailand Manufacturing (FTM), it was initially producing passenger car models like the Fiesta and Focus but when Ford decided to change strategies in the Asian region and focus on trucks, the factory switched to making only Rangers.
Ford built the second factory as demand for the Ranger grew. This was necessary as the 270,000-unit output from AAT was strictly fixed at 50:50 for each of the brands. This meant that Ford could get no more than 135,000 vehicles a year, even if Mazda did not use up its full allocation. Mazda too would have experienced the same frustration as the popularity of its models grew and one solution has been that its new BT-50 truck is now being produced at Isuzu’s factory (also in Thailand). In order to raise its output, Ford moved some production of the Ranger to FTM in 2016.
Next year will see the new generation of the Ranger entering the market and Ford expects demand to be even higher. Since its output from AAT remains capped, it is expanding FTM and is spending another US$900 million (about RM3.8 billion) on upgrading its manufacturing facilities and capabilities in Thailand, at both FTM and AAT. Over 44% of the investment is in the supply chain network to provide opportunities for local supply chain partners.
This is the largest-ever single investment in Ford’s 25-year history in Thailand and is recognition of the importance of the country as a global export production base for the company. “This is an important milestone to build on our quarter-century of commitment to producing vehicles in Thailand, enabling us to further modernize and upgrade our local operations, and support production for the exciting upcoming launch of the next-gen Ranger, one of Ford’s highest volume and most successful vehicles anywhere in the world, and the next-gen Everest SUV,” said Yukontorn ‘Vickie’ Wisadkosin, President, Ford ASEAN and Asia Pacific Distributors Markets.
Besides adding a second shift at FTM which provides over 1,200 new jobs, the overall investment also brings Ford’s manufacturing facilities in Thailand in line with the latest global efficiency, flexibility, and quality processes through extensive upgrades and new state-of-the-art manufacturing technologies.
The company is almost doubling the number of robots at both FTM and AAT, with the addition of 356 robots at the body shop and paint shop. This brings the level of automation at the body shop at FTM and AAT from 34% to 80% and 69%, respectively.
Ford also has increased its production capability for multi-variant truck production in FTM. By increasing model flexibility, the plant can produce multiple cab styles – single cab, open cab and double cab – on the same production line. This allows more flexibility in planning and scheduling so the plant can react more quickly to customer demand and reduce customer waiting time for a new vehicle.
As part of the investment, Ford is the first auto manufacturer to implement ScanBox technology in Southeast Asia. This latest surface scan capability improves the time used to accurately measure the whole vehicle by 5 times during the assembly process, helping Ford to increase efficiency in problem solving for better quality control.
In addition, FTM and AAT are making significant efforts to support environmentally friendly initiatives, including using renewable energy, reducing CO2 emissions, and practicing zero waste to landfill.
Exporting vehicles is a significant part of Ford’s manufacturing business in Thailand, with the Ranger going to over 180 markets around the world. AAT will be the lead production hub for the upcoming next-gen Everest SUV which would almost certainly be based on the new Ranger.
With Ford having revealed their next generation of the Ranger pick-up truck, Volkswagen is also releasing more details and images of its new Amarok. Why, you may wonder, is Volkswagen associated with Ford’s model reveal? It’s because the two carmakers have been working together on their new pick-up trucks. Ford had previously been collaborating with Mazda for its earlier Rangers, with Mazda’s version known as the BT-50. However, the two companies decided to end that collaboration and Mazda has teamed up with Isuzu, while Ford teamed up with Volkswagen.
Like the Ford-Mazda collaboration, a similar arrangement is now with the German carmaker’s Commercial Vehicles subsidiary. Just how much each party contributes is not known, just as it was never known with Ford and Mazda which had worked together since the first Ranger in the mid-1990s. However, Ford probably brings much truck expertise to the collaboration since it has been making such vehicles for more than 100 years, and it also makes the bestselling truck on the planet (albeit largely in North America).
Volkswagen has not had a strong presence in the truck market and even back in the 1990s, it was taking the Toyota Hilux and rebadging it to sell as a Volkswagen Taro. It developed its own model, the Amarok, ten years ago but that has not made a big impact in the time it has been in the market (over 800,000 sold globally). Now, with the new model to be adapted from the new Ranger, Volkswagen will have a more capable truck to sell. The carmaker is certainly expecting it to impress with numerous innovations.
New Amarok to be built at Ford plant
The Ranger was mainly developed in Australia and Volkswagen adds that there were also project teams in Europe. The Ford models will be built at two production hubs – in Thailand and in South Africa – and Volkswagen says its product will be built in South Africa (at Ford’s plant) as well in Pacheco, Argentina, where the current generation is built. Volkswagen has plant in South Africa as Uitenhage but it is not set up as a truck plant (it makes only the Polo and Cross Polo). Incidentally, Mazda’s new BT-50 is also made at the Isuzu plant in Thailand rather than the original facility which is jointly owned with Ford.
This is considered as the third generation and unless Volkswagen plans on entering more markets with the new Amarok, it will be sold in considerably less than the 180 markets the Ranger is in. It is mainly on sale in South America, Europe, South Africa, Mongolia and there are plans to sell it in North America.
Premium truck
To go on sale in late 2022, the new Amarok is presented as a premium truck and will have ‘clear Volkswagen DNA’, the company stresses. This probably refers largely to aesthetics and perhaps some specific equipment or features. The new vehicle has significantly more driver assistance systems and connectivity than before, which the Ranger is already well known for.
As is the case with shared models, the designers can only individualise areas like the lights and grille, and perhaps some of the bodywork as many of the structural ‘hard points’ are fixed. To alter them means additional engineering work and cost, defeating the benefit of joint development.
‘X design’ and Volkswagen DNA
In the case of the Amarok, Volkswagen is giving it a striking front end with defining ‘X design’, according to Albert-Johann Kirzinger, Head of Design at Volkswagen Commercial Vehicles. “We’ve given the strength and power of the new Amarok an unambiguous expression – with clear Volkswagen DNA, inside and out.”
“The Amarok makes possible what in many places appears impossible at first sight: it makes things easier for its users by assisting them in their work and everyday lives,” said Dr. Lars Krause, Brand Board of Management Member for Sales and Marketing at Volkswagen Commercial Vehicles. “That’s because the Amarok provides solutions that enable our customers to achieve their goals – especially when things get difficult.”
To know more about Volkswagen models available in Malaysia, visit www.volkswagen.com.my.
Roger Smith, the former General Motors Chairman and CEO from 1981 to 1990, introduced huge amounts of technology into the company in the 1980s to gain what he believed would be an advantage in vehicle production. He fantasized about a ‘factory of the future’ which would work 24 hours non-stop without needing lights as there would be no human workers. Everything would be automated so no worries about unions and strikes.
But total automation and high-tech have not proven to be the way to become an efficient and productive carmaker. In later years, after Smith had retired and GM formed a joint-venture with Toyota to operate a factory in California making cars of both brands, it would be discovered that the Japanese ‘secret weapon’ was not some advanced manufacturing equipment but something more human like training and having the right culture.
Three decades later, the new General Motors has created another high-tech factory though ‘future’ is no longer mentioned. It is actually the old Detroit-Hamtramck assembly plant which received a massive US$2.2 billion investment to be fully renovated for building a new generation of battery electric vehicles (BEVs).
The various meanings of ZERO
Recently opened, the factory is known as Factory ZERO and while ‘zero’ is today associated with ‘zero emissions’ from vehicles, the name also reflects the significant role the facility plays in advancing GM’s vision of a world with zero crashes and zero congestion. It will make models such as the GMC HUMMER EV Pickup and HUMMER EV SUV, Chevrolet Silverado EV and Cruise Origin, an all-electric, self-driving, shared vehicle.
All Factory ZERO EVs will be built on GM’s Ultium Platform which is the core technology for the company’s EV product strategy. The Ultium Platform encompasses a common vehicle architecture and propulsion components like battery cells, modules, packs, drive units, EV motors and integrated power electronics, and is fundamental at plants where EVs are produced.
Through the Ultium Platform, GM can realize a strategic value chain shift across its network of vehicle assembly plants as the company is able to commonize and streamline machinery, tooling and assembly processes. This gives the company flexibility which huge corporations sometimes lose, and enables lower capital investments and greater efficiencies as additional assembly plant transformations occur.
GM’s competitive advantage
GM retooled Factory ZERO for BEV production for two-thirds the capital required to build a greenfield (brand new) plant, making the facility a model for future GM facility renovations. Some of the approaches taken during construction include reuse or recycling of almost every material that came out of the old facility during conversion. This included crushed concrete from the floor, which was repurposed for temporary roads around the facility. Storm water will be recycled and of course, solar power will contribute to the electrical needs.
As the company continues its transition into an all-electric future, GM will avoid up to US$15 billion in capital costs by 2030 through the renovation of existing manufacturing facilities versus ground-up construction. The figure grows to US$20 billion to US$30 billion at 100% transition of all manufacturing facilities to support EV production. That capital can be redeployed more strategically for additional customer-facing products, services and technologies.
“To meet our ambitious EV transition, GM’s North American EV vehicle assembly capacity will reach 20% by 2025, and then 50% by 2030,” said Gerald Johnson, GM’s Executive Vice-President of Global Manufacturing and Sustainability.
Shortened launch time
Using virtual tools and working in parallel with production engineering teams, GM cut the manufacturing launch time in half – from two years to less than one – also gaining a competitive advantage. By comparison, a brand new factory, with planning and construction, could take up to 4 years from site selection to vehicle production.
Along with the capital advantages, GM’s commitment to renovating its existing network of manufacturing facilities during the EV transition also saves time. An accelerated launch and production start allow the company to get new-generation EVs to customers sooner. The first vehicles from Factory ZERO will be delivered to customers by the end of this year.
GM estimates that 80% of the assembly process for an EV is the same as that for conventional vehicles. This is another driver of speed for GM. The company has refined and perfected its own standardized manufacturing processes over many decades, and will launch its expanding portfolio of BEVs faster, with superior quality and a lower cost.
People still matter in manufacturing
Roger Smith imagined a factory with robots and almost no human workers but Factory ZERO, when fully operational, will employ more than 2,200 people. “Our people are GM’s true competitive advantage — an advantage you simply can’t buy or quickly build,” said Johnson, echoing what Japanese carmakers have often said.
As a BEV factory, Factory ZERO plays a direct role in GM’s commitment to eliminate tailpipe emissions from new light-duty vehicles by 2035 and become carbon-neutral in its global products and operations by 2040. The company has already made a commitment to invest US$35 billion in electric and autonomous vehicles, with plans to introduce more than 30 BEV models by 2025.
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.
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.
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.”