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This article first appeared in The Edge Financial Daily on May 4, 2018

KULIM: Sime Darby Bhd’s automotive arm Sime Darby Motors is targeting to produce more than 50,000 vehicles, as well as engine parts and components for the vehicles by 2020 at its manufacturing facility here.

The 80ha facility is owned by Sime Darby Motors’ subsidiary Inokom Corp Sdn Bhd. Sime Darby has a 56% stake in Inokom, while Bermaz Auto Bhd and South Korea’s Hyundai Motor Co own 29% and 15% respectively.

Currently, Sime Darby Motors assembles BMW, Hyundai and Mazda vehicles at the Inokom plant. Sime Darby’s auto dealerships include Audi, Jaguar, Land Rover, Porsche, Ford and Volkswagen.

Yesterday, Sime Darby Motors through its division Sime Darby Auto Engineering (SDAE) further cemented the collaborative partnership with BMW Group Malaysia by opening the new SDAE Engine Assembly Facility, adding to the existing facilities here.

Sime Darby chairman Tan Sri Dr Wan Abdul Aziz Wan Abdullah said the vision of Sime Darby Motors is to be the preferred contract assembly partner for the most dynamic automakers in Asean.

“The new SDAE Engine Assembly Facility opened today (yesterday), taking us one giant leap forward in making this goal a reality,” he said in his opening speech.

With a total investment of RM132 million by SDAE, the facility will cater to BMW Group Malaysia’s growing demand for locally assembled vehicles as well as support the marque’s export initiatives to other markets in the region. As of now, it has been announced that production of the facility will support the sale of BMW vehicles in the Vietnam and Philippine markets.

Sime Darby Auto Bavaria Sdn Bhd managing director Dennis Ho said the establishment of the plant allows Sime Darby to work closer with its partner and have access to new technologies that BMW is introducing in Malaysia.

“Today (yesterday) marks a new journey for us. It demonstrates the confidence that BMW has in Sime Darby and that it is satisfied with the relationship we have as partners in Malaysia. It allows us to partake more in the value chain of this assembly business,” he said.

Prior to the establishment of the engine assembly plant, Sime Darby already has a car assembly plant for BMW, located within the premises of Sime Darby’s manufacturing facilities, assembling more than 20 variants of BMW and MINI vehicles.

The engine assembly facility has a maximum capacity of assembling 20,000 units per year, and it hopes to achieve full capacity by 2019. It started operations on April 16 and the first delivery of engines from the plant will be on May 14. The plant has the capability to assemble three- and four-cylinder petrol engines, alongside four-cylinder diesel engines, as well as three- and four-cylinder combustion engines for plug-in hybrid electric vehicles. In Asia, BMW has similar engine assembly facilities in Thailand and India.

In Malaysia, BMW Group Malaysia achieved a 15% increase in deliveries of BMW, MINI and BMW Motorrad at 3,000 vehicles during the first quarter of 2018. In 2017, it achieved its highest-ever sales in the country at over 12,600 cars, representing an increase of 16% from the previous year.

BMW Group Malaysia managing director and chief executive officer Harald Hoelzl said Malaysia has long played the role of a strategic partner to BMW Group in Southeast Asia. “Malaysia is home to our regional data centre, training centre as well as parts assembling centre,” he added.

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