“Malaysia is the spearhead of Volkswagen’s strategy in the ASEAN region,” declared Armin Keller, MD of Volkswagen Group Malaysia and also the man who oversees ASEAN activities for the German carmaker. In this context, the country will not only see aggressive marketing activities to grow the brand’s business locally but also potentially become a regional hub from which vehicles can be produced and exported.
During a session with the media yesterday, Mr. Keller said that it is now possible to export cars from Malaysia as the level of ASEAN content in the Polo and Jetta has reached 40%, and there is an intention to do so next year. This is the level required in order to enjoy the provision under the ASEAN Free Trade Area (AFTA) agreement that allows for goods to be exported to other countries in ASEAN without import duty being imposed.
The obvious markets would be Thailand, Indonesia and Brunei (Singaporeans usually prefer their vehicles to be imported from Europe or Japan) but not the Philippines and the countries of Indo-China as those require lefthand drive (LHD) variants. However, Mr. Keller did not rule out the possibility of producing LHD variants in Malaysia if there is a business case (ie, the volume justifies the additional investment).
Although there was a news report some months back that Volkswagen will invest 1 billion euros in Thailand to build a new factory to make cars, Mr. Keller pointed out that the development was not officially confirmed by the company at all. He added that no decision has been made to go ahead with the project which must be operational by 2019 in order to enjoy the incentives offered under the Eco-Car programme.
“Yes, we applied to participate in the second phase of Thailand’s Eco Car programme and this was approved by the country’s Board of Investment. However, whether we will go ahead is not confirmed yet,” Mr. Keller explained.
It is likely that Volkswagen’s board will be reconsidering the investment in Thailand in view of the current situation there and the weakening market due to uncertain conditions. Manufacturers that are approved to participate in the Eco-Car programme must produce 100,000 units a year and exports are also expected.
Meanwhile, Mr. Keller said that Volkswagen is fully committed to its activities in Malaysia and is working towards extending the scope of its relationship with DRB-HICOM. The Malaysian conglomerate’s manufacturing complex in Pekan. Pahang, assembles three models for Volkswagen and if cars are also exported from Malaysia, it will mean more business for the factory as production will be raised.
While Volkswagen has not formed a joint-venture with DRB-HICOM for manufacturing operations, Mr. Keller said that this should not be an issue. “We have lots of Volkswagen personnel present in the factory to provide guidance and assistance to ensure that the cars are built to the highest quality at all times and we also have a good working relationship with DRB-HICOM,” he said.