China's Great Wall plans RM2bil auto plant in Kedah

Chinese automaker Great Wall Motor Co Ltd is close to making a splash in Malaysia with a whopping RM2bil investment to set up a manufacturing facility in Kedah, reliable sources told StarBiz.

Great Wall, the largest maker of sport utility vehicle and pick-up trucks in China, is listed on the Hong Kong Stock Exchange with a market capitalisation of HK$106bil (RM42.6bil).

The sources added that Great Wall planned to produce energy-efficient vehicles (EEV) for the Asean market at its Kedah plant, which will have an initial capacity of 80,000 units.

Great Wall's plans for Malaysia fall under the soon-to-be announced National Automotive Policy revision that, among others, opens the door for new EEV manufacturers to set up base in Malaysia.

A number of players have expressed interest to foray into Malaysia under the new policy.

Honda has already committed RM1bil to expand its Malacca facility to manufacture more EEV vehicles.

Baoding, Hebei-based Great Wall is in its final stages of discussion with the Malaysian government on its investment here.

"Proposals have been made, and meetings with the authorities are done. The announcement is expected to be made next month, pending the written approval from the International Trade and Industry Ministry and the Malaysian Investment Development Authority," said a source.

Last year, Great Wall recorded a net profit of 5.7 billion yuan (RM2.85bil), a commendable 62.6% increase compared to the previous year. It sold 620,000 vehicles in 2012, an increase of 28.3% compared to 2011, in addition to exporting 96,500 units of vehicles.

In 2013, the firm expects to sell 700,000 units and introduce 13 new models, including the Haval H2, Haval H8, Great Wall C50 2013 and the Wingle 6.

In comparison, Malaysia's total industry volume or TIV, which measures total new vehicle sales last year, amounted to only 627,753 units.

It is learnt that Great Wall intends to make Malaysia its manufacturing and supply chain hub for the Asean market.

The company has made some inroads into Malaysia since it started selling vehicles here in the third quarter of 2011.

According to statistics from the Malaysian Automotive Association, Great Wall sold 173 units of mostly commercial vehicles last year, compared to 87 units in 2011.

Great Wall also currently has a small completely-knocked-down assembly operation of its Haval H5 and Wingle 5 models via its local franchise holder, Green Oranges Sales & Services Sdn Bhd, a Naza family-owned company, helmed by chief executive officer SM Mohd Azli SM Nasimuddin.

Last year, Bulgaria opened its doors to Great Wall for the mass production of cars in the northern city of Lovech.

With that plant, Great Wall became the first Chinese automaker to assemble cars in the European Union. Great Wall also entered into a collaboration with Coda Automotive, a Los Angeles start-up electric vehicle maker, to co-develop electric vehicles, slated to hit the market in the second quarter of 2014.

Great Wall will give Coda access to its vehicle portfolio, while, in turn, Great Wall will get a partner to provide electric propulsion systems, including battery packs, energy management systems and drivetrain technology.

Source: The Star