Naza Corporation Holdings and Groupe PSA (better known as the people who manufacture Peugeot and Citroen) yesterday announced the signing of a share sale agreement and a joint venture agreement between them. The JV officially establishes future shared operations of the Naza Automotive Manufacturing (NAM) plant in Gurun, Kedah. This makes the plant the first manufacturing hub in ASEAN for Groupe PSA.
Front row : (from left to right) En SM Nasarudin SM Nasimuddin, Joint Group Executive Chairman / CEO, Naza Corporation Holdings Sdn Bhd and Mr Carlos Gomes, Executive Vice President, China and Southeast Asia, Groupe PSA, witnessed by The Honourable Dato Sri Mohd Najib bin Tun Haji Abdul Razak, Prime Minister of Malaysia, accompanied by Yang Berhormat Dato Sri Mustapa Mohamed, Minister of International Trade and Industry and Yang Amat Berhormat Dato Seri Ahmad Bashah Md Hanipah, Menteri Besar of Kedah Darul Aman at the Agreement Signing Ceremony between Naza Corporation Holdings Sdn Bhd and Groupe PSA.
The JV agreement will make Groupe PSA take up the majority stake in Naza Automotive Manufacturing (NAM). This allows Naza Group to take the responsibility for the sales and distribution of Peugeot, Citroën and DS Automobiles in Malaysia while together with Groupe PSA, explore sales and distribution prospects in other ASEAN markets. South East Asia, especially the ASEAN region has over 680 million people in the region and it is one of the fastest growing automotive sectors today.
The NAM plant in Gurun, Kedah has been operational since 2004 where it was first set up to assemble vehicles sold under the Naza Group, namely Kia and then, Peugeot. It has a workforce of close to 450 people and boasts an annual vehicle production capacity of 50,000 units.
This is a step forward in the partnership between Naza Group and Groupe PSA. The goals are now to develop a sustainable and profitable business in locally and also throughout the ASEAN region. Groupe PSA’s investment in the Naza Automotive Manufacturing (NAM) plant will see the implementation of its EMP2 modular platform dedicated to C and D segment vehicles.
With this agreement in effect, Groupe PSA and Naza will jointly produce Groupe PSA branded cars for Malaysia and other ASEAN markets. According to Naza Group, the first vehicles to be produced in 2018 for Peugeot over at the plant will be the award-winning Peugeot 3008 and then in 2019 the new Citroën C5 Aircross.
It seems that Groupe PSA are choosing the SUV crossovers to start their sales in ASEAN. Quite logical as the SUV market has been steadily growing and actually suits the rough roads in most ASEAN countries.
It has been quite a buzz recently in the industry. The agreement allows Groupe PSA to have a stronger footing regionally and it also allows them to have control over local assembly and manufacturing. What this could mean to consumers is that the production of Peugeot and Citroen vehicles would be up to Groupe PSA's standards. It seems to be the practice done by a few German marques locally too. With the direct involvement of the manufacturer, there is usually a jump in terms of overall quality of the products. This also allows Groupe PSA a direct access into markets for this region especially with the ASEAN Free Trade Agreement being implemented. A good way to take advantage of the tax incentives is to take over an existing plant within the region.
The Naza Group will have its hands free of managing the plant and can therefore concentrate their efforts on the marketing, sales and distribution of the car brands involved in the deal. If anyone wants to have a positive outlook on this is will actually allow the company to just focus on sales and aftersales rather than assembly. One less issue is always a good thing.
The JV agreement is also quite a milestone as it would basically entail some additional investments into Malaysia by Groupe PSA. It also means that there could be more interesting developments in Gurun and job security. It also means that Malaysia is a country where companies think that it is still economically viable to produce vehicles. Promising news indeed for the nation.
L to R: YBhg Datuk Wira Haji SM Faisal Tan Sri SM Nasimuddin, Joint Group Executive Chairman / CEO, Naza Corporation Holdings Sdn Bhd, H.E Frederic Laplanche, Ambassador of France, Yang Amat Berhormat Dato Seri Ahmad Bashah Md Hanipah, Menteri Besar of Kedah Darul Aman, En SM Nasarudin SM Nasimuddin, Joint Group Executive Chairman / CEO, Naza Corporation Holdings Sdn Bhd, The Honourable Dato Sri Mohd Najib bin Tun Haji Abdul Razak, Prime Minister of Malaysia, Mr Carlos Gomes, Executive Vice President, China and Southeast Asia, Groupe PSA, Yang Berhormat Dato Sri Mustapa Mohamed, Minister of International Trade and Industry, Yang Berbahagia Tan Sri Dr Ali bin Hamsa, Chief Secretary to the Government and En SM Faliq SM Nasimuddin, Deputy Executive Chairman, Naza Corporation Holdings Sdn Bhd at the Agreement Signing Ceremony between Naza Corporation Holdings Sdn Bhd and Groupe PSA.
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