Highlight: DRB to be biggest beneficiary of new NAP

top of a rebate in excise duties currently given to industry players in return for
stepping up their local value added (LVA) activities under the Industrial Linkage
Programme (ILP).
While Honda Malaysia has indicated that it will further invest in Malaysia, DRB
may also expand its manufacturing arrangement with Volkswagen, industry
observers say.
Currently, DRB assembles the Volkswagen Passat at its Pekan plant and plans
to produce the Polo and Jetta models for the local and regional markets. It has
been reported that DRB and Volkswagen will collaborate to come up with an
Asian car, although details are sketchy.
Apart from Volkswagen, DRB’s Pekan plant also assembles Mercedes- Benz’s
E-Class, C-Class and S-Class models, besides commercial and military
vehicles.
While these European marques have not unveiled any plans to further boost
investment in Malaysia to produce EEVs, any move by them will most likely be
in collaboration with DRB as well, industry observers point out.
Volkswagen has yet to have a full-fledged production hub in Southeast Asia, a
region where Japanese automakers have a clear lead. In September,
Volkswagen’s group production chief Michael Macht said the German car
maker is going to be more active in the region.
As the government takes a more open attitude towards welcoming competition, DRB should be able to seize the opportunity to get
Volkswagen to set up a full-scale production hub here, specifically in the EEV segment, industry players say.
For the financial year ended March 31, 2013, DRB’s automotive segment (excluding Puspakom, which is categorised under the services
segment) posted a pre-tax profit of RM300.74 million on revenue of RM10.14 billion. The numbers include Proton’s contribution as well as
a share of profits from associate ventures such as Honda Malaysia.
The segment’s performance has improved significantly for the six months ended Sept 30, 2013, registering a pre-tax profit of RM290.4
million on revenue of RM5.3 billion.