DRB-Hicom's Pekan Plant To See Higher Production
PEKAN, Oct 29 (Bernama) -- DRB-HICOM Bhd says its automotive plant in Pekan, Pahang is continuing to grow at a fast pace, with production expected to reach 90,000 units of passengers cars annually within five years.
The plant, which commenced operations in 1983, currently produces about 60,000 units a year.
It assembles passenger and commercial vehicles for Mercedes-Benz, Suzuki, Isuzu-Hicom and its subsidiary, DRB-Hicom Defence Technologies Sdn Bhd(DefTech).
There is room to produce more as the plant is only operating for one eight-hour shift five days a week, chief executive officer for Hicom Automotive Manufacturers (Malaysia) Sdn Bhd, Abdul Rashid Musa, told reporters during a media tour of the plant here on Thursday.
Hicom Automotive Manufacturers is among DRB-Hicom's subsidiary operating the plant. The other subsidiary operating here is DRB-HICOM Auto Solutions Sdn Bhd, which operates the pre-delivery inspection centre.
"Now, we only produce for one-shift. We will have more capacity if we produce two-shift a day," Rashid said.
For the Mercedes-Benz, he said the plant produces about 30 vehicles daily including commercial vehicles, which in total will see about 5,000 vehicles being produced a year.
With an investment of about RM120 million in Pekan, Mercedes-Benz Malaysia's collaborative effort with DRB-Hicom has resulted in the local assembly of some of the world's most coveted passenger cars such as the Mercedes-Benz S-Class, E-Class and C-Class as well as the Mercedes-Benz and Mitsubishi Fuso commercial vehicles.
It is also currently assembling the new E-Class model, which is expected to be launched December, Rashid said, adding that Mercedes-Benz has plans to bring more volumes to Pekan.
Along with its partners' expansion, he said the 240-acre plant will see more investment by its partners from time-to-time.
"For example if they want to launch new cars, they have to bring in more tools and this will provide new investment for the plant," he explained.
DRB-Hicom has invested about RM800 million on the plant, while its partners have invested about RM200 million.
Turning to Suzuki, he said the plant had the capacity to produce 1,000 units of Suzuki-Swift a month in a single-shift.
The first Suzuki model assembled in Pekan was Suzuki Jimny (1985).
On its subdisiary, Deftech which has been recognised as a renowned supplier of army land vehicles in the country, he said the company has set its sight on producing commercial vehicles.
"The bus segment will be our core. We want to be Malaysia's top bus producer," Rashid said.
"Sometimes the commercial segment contributes the most to our revenue, that's why we really want to look to this," the newly-appointed chief executive officer of Deftech, Abdul Harith Abdullah, said.
Under its commercial vehicles, Deftech currently produces city and intercity buses, surveillance and command vehicles as well as trucks.
In 2007, the company secured a RM800 million contract to supply army vehicles and intercity buses for Rapid Penang.
It's in the process of delivering and the last will be in 2010, he added.
DRB-HICOM's other unit, Isuzu-Hicom, which assembles commercial and passenger vehicles such as trucks and pick-up, plans to focus on medium-heavy duty trucks by producing 250-300 trucks a year.
Its chief executive officer, Norifumi Matsumoto, said the company planned to tie up with more distributors and introduce more line-up to compete with European manufacturers.
With a market share of 30 per cent currently, he said Isuzu-Hicom planned to beat its competitor, Daihatsu, who holds 33 per cent share of the truck market.
Isuzu-Hicom will also invest more to train its staff, in line with its plan to increase its current capacity, Norifumi said.
Its current production capacity is 12,000 units annually.
Meanwhile on sales, he said the company saw a drop by 20 per cent due to less demand amid the current economic climate.
Due to the uncertainties, the industry saw demand for trucks slipping to 13,000-14,000 units from about 30,000 previously.
"At the moment we still can't see positive numbers," he said, adding that next year may be better.