Honda launches Malaysian JV

Honda launches Malaysian JV

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.