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Sime Darby Bhd’s 51 per cent-owned Inokom Corporation Sdn Bhd is in talks with several global automotive players to be their regional car assembler and distribution partner.

KULIM, Kedah: Sime Darby Bhd’s 51 per cent-owned Inokom Corporation Sdn Bhd is in talks with several global automotive players to be their regional car assembler and distribution partner.

Sime Darby Motor Sdn Bhd (SDM) managing director for Malaysia, Taiwan and Thailand Dennis Ho said Inokom was expected to finalise the prospect by the year-end.

“We have signed non-disclosures agreements with the players to become their assemblers. We are not limited to the electric vehicle (EV) and plug-in hybrid electric vehicle (PHEV) as well as internal combustion engine (ICE) but rather all range of vehicle segments including for the original equipment manufacturers’ (OEMs) parts and components.”

Ho was speaking to reporters at a familiarisation tour of Inokom plant here last week.

He said SDM was competing with other rivals in the Asean region to convince the players to set up their assembly facilities at Inokom.

“We are confident because we have advantages of working with BMW, Mazda, Hyundai and Mini to show our level of competencies.

“We are also willing to develop a 50-acre plot of land within the plant to make way for the new facilities in the next three years,” he added.

Ho said the potential development would comprise assembly plants for those players with additional activities to support new value-chain productions.

“SDM will bear the long-term investment cost of the facilities on the 50-acre of land if the deal is materialised,” he said.

With a 110-acre or 55 per cent of utilised rate, Inokom is licensed to produce and assemble passengers cars, multi-purpose vehicles and multi-utility vehicles and commercial vehicles as well as agricultural trucks.

The set up of each plant at Inokom was made by benchmarking to individual principals or OEMs requirements such as design and product layout, assembly line and processes, product quality assurance.

Inokom managing director Mohd Rizal Jailan said the facility adopted plant-within-a-plant concept to meet its customers unique build process requirements and quality standards.

“We are actively engage with existing OEMs and new players to set up their operations at Inokom, enabling us to establish the plant as a regional assembly hub.

Touted as a boutique plant, Mohd Rizal said Inokom appeals to a low volume and high value products for a niche market with a flexible platform of producing numerous car variants and components.

“We have gained recognition and fulfilled the key performance indicators of our principals primarily BMW Group, Hyundai and Mazda,” he said.

SDM is fully-owned by Sime Darby Bhd, which currently represents 29 automotive brands in nine countries in Asia Pacific.

Mohd Rizal said Inokom would need to undertake feasibility study on the amount of the capital expenditure for the new facilities. The allocation was also dependent on the mode of collaboration with new principals.

Currently, Inokom assembles the Hyundai Elantra, Santa Fe, Tucson and Ioniq; Inokom Lorimas and Inokom HD 500, BMW 3 Series, 5 Series, 6 Series, 7 Series, X1, X3, X4, X5 and MINI, and Mazda CX5.

Inokom’s assembled vehicles comprise 81 per cent energy efficient vehicle (EEV), 14 per cent PHEV and five per cent hybrid segment.

Its assembled car market consist of 35 per cent for export market and the remaining 65 per cent were locally sold, with a combined production volume of 37,000 units last year.

Ho said Inokom was expected to assemble 50,000 cars annually in the next three years.

“We will continue to work with existing and new partners on research and development to achieve higher localisation content requirement for their vehicles.

“We aim to grow the export market in Asean particularly the PHEV segment in the next three years as well as to achieve about 40 per cent localisation content,” he said.

The Inokom plant has 2,336 employees, 100 per cent of which are Malaysians. Inokom produced 22,000 units of Mazda CX5, 3,000 units of Hyundais, 13,000 units of BMWs last year.

SDM has invested over RM400 million in Inokom Plant since it acquired the facility from Berjaya Group Bhd in 2005.

SDM’s division Sime Darby Auto Engineering Sdn Bhd produces BMW engines (three and four cylinders) with 50 units daily, since its first operation in May 2018.

With an initial investment of RM132 million, every engine is built from scratch with high level of automation, while the components are imported from BMW-approved sources.

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