Tengku Zafrul: Chery's localisation move refutes claim that Malaysia's auto supply chain not cost effective

KUALA LUMPUR: China car company Chery's move to set up their own assembly plant in Shah Alam, refutes claims that Malaysia's automotive supply chain is not cost effective, Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Abdul Aziz said.

In his speech at the launch of Chery's assembly plant, he said the new facility symbolises not just an expansion of their operational capabilities but also their unwavering commitment to assembling vehicles that are both technologically advanced and affordable.

Tengku Zafrul added that it also promotes domestic production, and job creation.

"Chery's swift move into localisation involves substantial investment in localvendors. This approach has significantly reduced the cost of Chery's locally produced components, effectively refuting the allegation that Malaysia's automotive supply chain cannot be cost-effective, " he said in his speech.

Earlies this month, Geely chairman Li Shufu reportedly said that Malaysia's automotive supply chain costs 30 per cent higher than China and 10 per cent higher than Thailand, due to a reliance on overseas imports for supply of parts.

Li said that Malaysia's automotive parts supply still relies heavily on overseas imports, and that the relatively small size of the local automotive market meant it was difficult to get enough scale to keep costs down.

Since the launch of two Chery models, the Omoda 5 and Tiggo 8 Pro, in July last year, Chery recently rolled out its 10,000th locally assembled vehicle at Inokom's Kulim plant.

Chery Malaysia pledged an investment of RM1 billion in Malaysia last year.

"We are proud of Chery's approach and rapid expansion as well as steadfast dedication to their investment commitments. Their efforts in producing high-quality vehicles align perfectly with our national goals of advancing technology, fostering economic growth, and providing Malaysians with more affordable, high-quality car options," Tengku Zafrul said.

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