VW enters deal with DRB Hicom to start production in Malaysia in 2011

Article by Christian Andrei, on December 22, 2010

Starting at the end of 2011, Volkswagen AG will locally produce its Passat model at partner DRB Hicom's factory in Pekan, central Malaysia. This is part of Volkswagen’s Strategy 2018 to achieve its goal of surpassing Toyota Motor Corp. as the top global automaker in sales and profitability.

VW said that from the end of 2012, the Malaysian factory will build more VW models in a second expansion phase.

VW will also be expanding the production in major global markets such as China and is preparing to launch a new U.S. plant in the Chattanooga, Tennessee, next April.

VW sales and marketing head Christian Klingler said that the company considers the market potential in southeast Asia to be of “major significance” to its long-term growth strategy. In a statement last Tuesday, Klingler said that the Malaysian automobile market, which racked up sales of over 570,000 units in 2010, has a vital role in VW’s strategic planning.

VW said that the factory will successively increase its annual capacity. DRB Hicom is a major producer of passenger cars and commercial vehicles in Malaysia.

It is also a key car retailer with a nationwide sales network. For this venture, VW and DRB Hicom will invest $318 million to transform Malaysia into regional automobile manufacturing hub for Volkswagen, according to a report from state news agency Bernama.

Topics: vw, production, malaysia

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