Tuesday, 10 January 2012

DRB-Hicom Tied Up with VW and Possibly Proton

A report from The Edge today: Volkswagen eyes 10% of local passenger car market. Is it possible?

In Malaysia, Proton & Perodua with their Saga, Persona, Viva, Myvi etc already snatch more than 50% market share of passenger car. If VW wants to share 10% of the market, then it must be at least as popular as Toyota and Honda here.

Most people here think that VW is a quality premium European car only for the rich. Recently-launched CBU C-segment Jetta is priced at RM150k, well above direct competitor like Civic and Corolla Altis. However, VW has signed an agreement with DRB-Hicom last December to produce CKD VW cars in DRB-Hicom's plant in Pekan which has the annual capacity of 96,000 and only 18% utilized currently.
The collaboration between DRB-Hicom and VW is said to be some where between 70/30. First CKD VW model to roll out will be VW Passat, then should be followed by Jetta. VW also plans to add 12 new models in 2012. It plans to position itself to compete with the likes of Toyota, Honda & Nissan, not those luxury Mercedes and BMW. VW is known for its quality and powertrain, if its CKD cars can be priced competitively compared to other Japanese makers, then it will surely attract more buyers.

Besides VW, DRB-Hicom also confirmed to bid for the 42.7% Proton stake held by Khazanah, along with Proton's chairman Mohd Nadzmi and ?Naza/Arumugam/Gerald Lopez etc. Looking at the list, it is rather easy on paper to predict who will win the bid. If successful, DRB-Hicom will have extra car manufacturing capacity in Tanjung Malim which is only 52% utilized.

If VW can achieve their sales target, then surely it will be good news for DRB-Hicom, who can also export the cars to ASEAN countries.

If DRB-Hicom acquire Proton, then it should be good news for both parties, with Proton strong sales volume and DRB-Hicom's strong financial and collaboration with VW.

      Proton Tuah: Coming Soon

Nevertheless, regarding VW cars external design... err... a bit out-dated.

     Jetta 2011: Civic in the 1990's?

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