KUALA LUMPUR (April 1): Bermaz Auto Bhd (BAuto) is partnering Kia Motors Corp to undertake manufacturing and distributing Kia vehicles in Malaysia.
The two parties are forming a JV company named Kia Malaysia Sdn Bhd (KMSB) to undertake the assembly of complete knock-down (CKD) Kia vehicles here whereby BAuto will own 33.33% with the remainder to be held by Kia Corp.
“Kia Corp intends to make KMSB the regional manufacturing hub for its Kia brand of vehicles in ASEAN countries and other potential markets,” said BAuto in its filing.
The JV will produce its first two models Kia Seltos and Kia Carnival, with a third model to be determined later. BAuto said it may fund up to RM20 million for its portion of KMSB’s share capital depending on the company’s funding requirements.
Concurrently Kia Corp has also appointed Dinamikjaya Motors Sdn Bhd as the new distributor of Kia vehicles in Malaysia.
BAuto announced today that it will pay RM3.25 million to subscribe to a 65% stake in Dinamikjaya from its original promoters and shareholders “which are also involved in the wholesale and retail of motor vehicles in Malaysia”.
“After months of searching for the right partner, Kia is delighted to enter into the Kia JV and Kia Distributorship with BAuto,” Kia Asia Pacific president and chief executive officer Tae Hun Lee said in a statement.
“With BAuto’s proven capability in successfully building up automotive marques in Malaysia and the Philippines as well as their automotive manufacturing experience, we believe we have placed the Kia brand in good hands under the capable leadership of its Executive Chairman, Datuk Seri Ben Yeoh,” Tae added.
Yeoh, in the same statement, said that the Kia JV and distributorship will complement BAuto’s existing group automotive businesses — which include being the official distributor of Mazda models here.
“We are pleased to be given this opportunity to undertake the Kia JV and Kia distributorship with our partner Kia under Hyundai Motor Group, which is Korea's second-largest multinational automotive manufacturer and currently the fifth-largest automotive manufacturer in the world,” Yeoh said.
It was reported in October last year that Kia’s official distributor Naza Group was looking to let go of its distributorship of the Korean carmaker as well as Peugeot as a result of the weak automotive market, with BAuto tipped by analysts as the likely winner.
Shares of BAuto closed unchanged at RM1.44 today, valuing the automotive outfit at RM1.68 billion.