Thursday, May 03, 2018

BMW Group Malaysia Together With Sime Darby Auto Engineering (SDAE) Officially Open Engine Assembly Plant for BMW engines in Kulim, Kedah

BMW Group Malaysia and Malaysian partner, Sime Darby Auto Engineering (SDAE), have officially opened their new SDAE Engine Assembly Facility in Kulim, Kedah. The new engine assembly plant sits on a land site of over 6 acres in size and has a built-up area space of 8,500 square metres. It was made possible with an investment of over RM 132 million by SDAE. It represents a major milestone in terms of the Malaysian automotive industry as well as a major step by BMW Group here in this region.

The new engine assembly facility is equipped with the newest capabilities in engine assembly technology and will support BMW Group Malaysia’s growing demand for locally assembled vehicles  as well as support the premium automaker’s export initiatives to other markets in the region. This facility has the industry's newest innovation for engine assembly including EST tightening equipment, Dosing and Bonding Technology (DoboTech) equipment, engine engraving, engine oil filling and test machines for hydraulic valve play compensation, leak tests as well as hot and cold testing (hot testing facility is the first in Malaysia). 

The new facility employs up to around 60 personnel and it demonstrates a commitment by both BMW Group Malaysia and SDAE in increasing employment opportunities and career growth prospects within the local job market in the Kulim Hi-Tech area. BMW also states that there is no difference in quality because the quality controls in place are like the ones used in Germany. The key personnel  of the plant have also been sent over to Germany for proper training.

Mr. Harald Hoelzl, Managing Director and CEO of BMW Group Malaysia said, “Malaysia has long played the role of a strategic partner to the BMW Group in South East Asia and this significance is reflected in our business performance here which mirrors our achievements worldwide. In the first quarter of 2018, the BMW Group is already on target for an eighth consecutive year of record sales with a delivery of 604,629 vehicles worldwide, a 3% growth as compared to the same period in 2017.”

 “The positive performance worldwide echoes in Malaysia, where BMW Group Malaysia has already successfully achieved a 15% increase in the deliveries of BMW, MINI and BMW Motorrad vehicles in the country, delivering 3,000 vehicles in the first quarter of 2018.” added Hoelzl.

Datin K. Talagavathi, Deputy Secretary General (Industry) of Ministry of International Trade and Industry Malaysia said at the opening ceremony, “I am pleased to officiate the opening of the new Sime Darby Auto Engineering Engine Assembly Facility here in Kulim, Kedah today. The new engine assembly facility developed through the partnership and initiatives of Sime Darby Motors and the BMW Group, will not only boost the local capabilities and regional competitiveness of the country but will also create employment opportunities and raise technical competency skills for Malaysians.”

She added that the new engine assembly facility, alongside the assembly plant and the Regional Parts Distribution Centre in Johor by premium automaker BMW Group would promote the exchange of technological know-how, thereby developing a more innovative and talented workforce in line with the transformation aspirations of the country.

Ms. Ilka Horstmeier, Senior Vice President, Production Engines and Electrified Powertrains, BMW Group said, “Today is a very special day: together with SDAE we have managed to establish a new engine assembly for BMW engines in Malaysia. Our strong cooperation with our reliable partner comes to fruition with the assembly of 3- and 4- cylinder petrol engines, alongside 4-cylinder diesel engines, as well as the 3- and 4- cylinder combustion engines for the Plug-In Hybrid electric vehicle.”

Echoing her sentiments, Tan Sri Dato’ Sri Dr. Wan Abdul Aziz Wan Abdullah, Chairman and Non-Independent Non-Executive Director of Sime Darby Berhad said, “Sime Darby Motors’ vision is to be the preferred contract assembly partner for the most dynamic automakers in ASEAN. We aim to produce more than 50,000 vehicles as well as the engine parts and components for the vehicles by the year 2020. The new SDAE Engine Assembly Facility opened today takes us one giant leap forward in making this goal a reality.”

The number mentioned above is for the total Sime Darby plant output. At least 10,000 of those are locally assembled BMW vehicles. This new engine facility  at the moment can assemble 60 engines per day or. 1,200 per month on the regular five dat work week. The export markets that have been established for these locally assembled engines are Vietnam and the Philippines.

All of these will enhance Malaysia's position in the ASEAN automotive region. Now, we shall see 3 and 4 cylinder petrol and diesel engines made in Kulim and supplied throughout the region. With the new engine facility, the local assembly of BMW vehicles and the regional Parts centre mentioned above, job creation by the BMW Group is definitely along the lines of why the government of Malaysia wants business to make their products in Malaysia. 

What this does is create more jobs for Malaysians. With a rapidly growing population, a key factor has to be job creation and we see this first being done here in Kulim. One must also note that the creation of an assembly plant also adds other supporting work required. In this case, there could be more transport required to deliver in raw materials and parts for assembly as well as transport required to send out the finished products to the vehicle assembly plant as well as even as spares to other places. 60 jobs and a new plant may also create a spillover effect, which is always welcome as it will drive the economy forward. I do think that whilst we may be losing jobs and we may hear of factories closing down, we seldom hear good news like this, which will actually replace or add to the job market here in Malaysia. 

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