Volkswagen to Assemble Their Cars in Malaysia

Christian Klingler, Member of the Board of Management of Volkswagen AG, and representatives from the partner company DRB Hicom signed an agreement for local vehicle assembly. The deal, signed in the presence of Malaysian Prime Minister Datuk Seri Najib Tun Razak, will lead to the establishment of a VW regional production hub in Malaysia by 2012.

“Developing the market potential of the ASEAN region is of major significance for the Volkswagen Group’s long-term growth strategy,” Christian Klingler, who is also responsible for Sales and Marketing, commented in Kuala Lumpur. He explained that the Malaysian automobile market in particular, where more than 570,000 vehicles have been sold so far in 2010, plays a crucial role in VW AG’s future.

“We will be using existing structures and capacities at the DRB Hicom plant in Pekan to systematically extend our presence in the Malaysian market of the future,” Klingler also said. The first VW model to roll out of Malaysian factories will be the Passat that will be assembled from the end of 2011. It is planned to build further Volkswagen models for the Malaysian market on the basis of a local full scale production in a second expansion phase from the end of 2012.

Volkswagen Group signed a memorandum of understanding to investigate local vehicle production with the Malaysian partner DRB Hicom back in August 2010. The announcement came just weeks after the German carmaker ended its lengthy negotiations with Proton, after it failed to agree on management and equity terms.

Partner company DRB Hicom is bringing the largest automotive production network to the negotiations. Its passenger cars and commercial vehicles are built at its plants in Pekan and Melaka. With a nationwide sales network, DRB Hicom is also an important automobile dealer and importer in Malaysia.