Daihatsu boosts KL stake

Daihatsu boosts KL stake

TOKYO (AFP): Japanese minicar maker Daihatsu Motor Co. Ltd. will take a majority stake in its Malaysian auto joint venture to raise output capacity there by 25 percent, a report said Sunday.

The automaker, a subsidiary of Toyota Motor Co., plans to boost its 25-percent stake in the Malaysian partner Perusahaan Otomobil Kedua Sdn. Bhd. (Perodua) and take over the management, the Nihon Keizai Shimbun reported.

Daihatsu also aims to increase its annual output capacity at the firm by a quarter to 150,000 vehicles, the leading business daily reported.

The move is aimed at strengthening the health of the Malaysian firm ahead of the introduction by 2003 of the ASEAN Free Trade Area (AFTA), which will reduce tariffs for most products in the region to a maximum of five percent.

An end to Malaysia's high import tariffs on cars, which had benefited the partners, forces them to boost competitiveness, the paper said. Malaysia has obtained a two-year reprieve for its auto industry until 2005.