This article first appeared in The Edge Malaysia Weekly on February 26, 2018 - March 4, 2018

THE Naza group is understood to have secured an international investor to take up almost 60% equity interest in its plant in Gurun, Kedah, sources say.

While details are scarce, all signs point towards France’s Groupe PSA, which has a long-standing relationship with the Naza group.

Nasim Sdn Bhd, a wholly-owned unit of the Naza group, was appointed the official distributor of Peugeot cars in Malaysia in January 2008 while Naza Euro Motors was given the mandate to distribute Citroën vehicles in the country in January 2013.

Others say it could be South Korea’s Kia Motor Corp, but many industry officials believe that Groupe PSA has clinched the deal.

A signing ceremony is slated to take place this week.

The price tag being bandied about for the acquisition of the 60% stake is about RM400 million.

Naza’s top brass could not be contacted for comment.

“It should be Groupe PSA buying the stake … it makes more sense,” one industry executive says without elaborating.

The automotive assembly plant is parked under Naza Automotive Manufacturing Sdn Bhd and was set up in 2004 at a cost of RM700 million. At present, the plant, which has an annual production capacity of 50,000 units, manufactures Kia, Peugeot and Citroën vehicles for the local and overseas markets.

The overseas markets include Thailand, Indonesia, Brunei, Sri Lanka, Australia, New Zealand and right-hand-drive markets in Africa. In fact, Groupe PSA, via Naza, made Malaysia its right-hand-drive production hub back in 2010.

Other than an assembly plant, the sprawling 140-acre facility also has a two-storey office, a test track, lots for vendors and suppliers to operate and accommodation and recreation facilities for Naza’s 1,000 employees.

For Naza, having Groupe PSA as an equity partner in the Gurun plant is a coup. Some of the brands under Groupe PSA — the second largest car manufacturer in Europe — include Peugeot, Citroën, Opel and Vauxhall.

To put things in perspective, last year, Groupe PSA sold 3.63 million vehicles worldwide, marking a fourth consecutive year of improvement in sales. The carmaker’s market capitalisation was in excess of €16.3 billion at its close of €18.03 last Friday.

A couple of years ago, Groupe PSA was in the running to buy a strategic stake in national car maker Proton Holdings Bhd but was pipped to it by China’s Geely Automobile Holdings Ltd.

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