Honda launches Malaysian JV

Tue, 03 Jul 2001 | Source: REUTERS

KUALA LUMPUR (Reuters): Japan's third-largest automaker, Honda Motor Co Ltd, launched on Monday the operations of its joint venture in Malaysia, strengthening its presence in Southeast Asia ahead of tariff cuts in 2003.

The firm, called DRB-Oriental-Honda Sdn Bhd (DOH), signed agreements on Monday with 39 dealers to distribute Honda vehicles throughout the country.

DOH is 49-percent-owned by Honda and 36-percent by Malaysia's DRB-Hicom.

Oriental Holdings, which has been the Japanese carmaker's sole agent in Malaysia for nearly 45 years, will take the remaining 15-percent stake.

DOH will begin building a new manufacturing plant in the southwestern state of Malacca in September at a cost of 175 million ringgit (US$46 million). The plant, which is expected to start production by early 2003, will be capable of making 20,000 vehicles annually.

The venture makes Honda the first foreign carmaker to set up a manufacturing base in Malaysia ahead of a reduction in protective taxes under the ASEAN Free Trade Area (AFTA) in 2003.

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