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NEWS UPDATES 5 January 2010

Malaysia’s Naza ready to tie up with US automaker

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US car manufacturer General Motors Corp (GM) and the Naza group are expected to disclose details of their partnership this week, local business paper the SatrBiz reported, citing an industry source.

“The parties are working on it and a press release will be issued in a day or two,” the source told StarBiz yesterday.

Meanwhile, the Naza group said in a statement yesterday that a memorandum of understanding (MoU) was recently signed between group joint executive chairman SM Faisal SM Nasimuddin and GM Southeast Asia Operations and Chevrolet Sales (Thailand) Ltd president Steve Carlisle.

“This is part of the group’s on-going efforts to continuously look out for viable business opportunities with foreign partners to complement and consolidate our automobile sales portfolio.

“Announcements as to the details of partnership will be made known to the public in due course, upon formalisation of the agreement,” Naza said. Carlisle, when contacted at his office in Thailand, declined to comment.

The source said a distributorship agreement between GM and Naza was in the works following the signing of the MoU. He said Naza was “very well positioned” to promote the Chevrolet brand in Malaysia.

“It is one of the best automotive players in the market and would make a strong partner to grow the business in Malaysia,” he said, adding that Naza had a “good business plan” for GM.

He also said GM intended to launch six to eight new Chevrolet models in Malaysia within three years, with plans to extend its dealership network to 25-30 from seven currently within the same period.

“Naza also has a good manufacturing facility (in Gurun, Kedah) which can help GM produce cars in Malaysia,” he said. All Chevrolet models are currently fully imported.

In a joint statement last week, DRB-HICOM Bhd and General Motors Asia Pacific Holdings Co LLC said they had mutually agreed to discontinue their existing joint-venture agreement to import and distribute Chevrolet vehicles in Malaysia effective Jan 1. No reasons were disclosed.

DRB-HICOM group director for automotive Datuk Nik Hamdan Nik Hassan told a press conference a day later that the partnership had ended mainly because the parties had very differing business models.

DRB-HICOM originally handled the Chevrolet franchise via wholly-owned Hicomobil Sdn Bhd in 2003. The set-up was superseded in 2007 by HICOM-Chevrolet Sdn Bhd, a 51:49 joint venture in favour of GM via General Motors Asia Pacific.

Since 2003, about 15,000 Chevrolet cars had been sold locally, comprising three main models, namely Aveo, Optra and Captiva.

OSK Research motor analyst Ahmad Maghfur Usman said the tie-up could see GM riding on Naza’s large distributorship base.

“GM has been having a tough time expanding its market share in Malaysia, given the stiff competition in the segments it is competing in. Hopefully with Naza’s large distributorship base, sales numbers will start improving.

“We could see the GM vehicle re-badged as a Naza one to make pricing more attractive. That’s the only reasonable sense I can think of why Naza would be an interesting proposition to GM,” he said.


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