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Toyota's $488M plant in Malaysia

Showing confidence in Malaysia’s prospects, Tatsuro Takami, right, Toyoto Motor's managing officer, and UMW's Akio Takeyama, left, announced a new Toyota assembly plant to double their joint venture’s production capacity. 

KUALA LUMPUR -- Toyota Motor Corporation announced on Wednesday construction of a new joint-venture assembly plant for passenger vehicles to cater to increasingly affluent Malaysian motorists.
The 2-billion ringgit ($488 million) plant will be built by UMW Toyota Motor, a 49:51 joint venture between the Japanese carmaker and its local partner, UMW Corporation.

The investment covers land, construction, and plant, is by far the largest undertaken by the joint venture since its establishment in 1982. It comes at a time when foreign direct investment (FDI) in Malaysia has slumped because of a commodity slowdown.

FDI in Malaysian manufacturing declined 45% year on year to 21.9 billion ringgit in 2015, and investment from Japan, which had been a top contributor, fell 70% to 4 billion ringgit.

Construction of the new plant, located in the outskirts of Kuala Lumpur, is expected to begin later this year for commissioning in 2019. It has an annual assembly capacity of 50,000 vehicles, which matches an existing plant.

Toyota targets Malaysian middle-income earners with Vios and Camry cars, Innova and Fortuna multipurpose vehicles, and pick-ups. Prices start at about 60,000 ringgit.

With a market share of 14%, Toyota is the largest marque in the non-national automotive car segment, but competes closely with other Japanese carmakers in the top three positions. Malaysia recorded sales of 666,674 vehicles in 2015, making it Southeast Asia's third largest market after Indonesia and Thailand.
"We hope to achieve higher competitiveness," Tatsuro Takami, Toyota Motor's managing officer, told reporters. He said the new plant will boost cost-effectiveness and operational efficiency using advanced technology.

This article originally appeared on asia.nikkei.com

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