Honda expected to tie up with KL firms
Honda expected to tie up with KL firms
KUALA LUMPUR, Malaysia (AP): Honda Motor Co. Ltd. of Japan was
reported Wednesday to be ready to take a 49 percent stake in a
proposed joint-venture company with two Malaysian automotive
firms.
The national news agency, Bernama, cited industry sources as
saying that the two Malaysian firms, DRB-Hicom and Oriental
Holdings, will share the remaining 51 percent.
The companies refused to comment pending an official
announcement. Prime Minister Mahathir Mohamad was scheduled to
preside over a signing ceremony later Wednesday.
The joint-venture company would initially produce between
15,000 and 20,000 Hondas annually, catering for local and export
markets, the news agency reported.
DRB-Hicom is in the midst of selling its stake in Malaysia's
leading national automaker, Proton, to state oil company
Petronas. Oriental is involved in the second Malaysian car
company, Perodua.
Auto industry sources told Dow Jones Newswires on condition of
anonymity that DRB-Hicom would hold a 31 percent stake in the
venture with Honda, and Oriental take 20 percent. No value was
disclosed.
The deal would come a day after Mahathir said that giant
foreign auto firms, which he did not identify, had sought to take
100 percent ownership of Proton as part of a plan to cement
control over the global auto market.
Proton and Perodua models dominate the Malaysian roadways,
protected by high tariffs against imported vehicles, under
Mahathir's long-cherished plan to develop an auto industry
capable of competing in global markets.
The tariffs have caused friction with Thailand, which has
turned itself into an offshore manufacturing platform for major
U.S., Japanese and European automakers seeking to export around
Southeast Asia.
Malaysia has balked at lowering tariffs protecting its
domestic industry until at least 2005, though the free trade area
under way in Southeast Asia calls for an end to most tariffs by
2002.
The new joint venture would add Malaysia as a regional
automating base for Honda, which already has factories in
Thailand.