Malaysia to triple motorcycle output

Malaysia to triple motorcycle output

GURUN, Malaysia (Reuter): Malaysia's national motorcycle firm, Motosikal dan Enjin Nasional Sdn Bhd (Modenas), said yesterday it planned to triple annual production capacity to 350,000 units in three years.

Modenas chairman Yahaya Ahmad said the company also aimed to capture 30 percent of the local market for 110 cc motorcycles, pegging sales to its sporty design, pricing and local pedigree.

"We think Malaysians are very nationalistic and if they have a motorbike which is nice-looking and competitive in design and performance, then we feel we can win their hearts," he said.

Yahaya was speaking after the opening of Modenas' 300 million ringgit plant in Gurun, in northern Kedah state, yesterday.

The market size for the 110 cc motorcycle class was currently around 260,000 units, Yahaya said.

A Japanese trade official said Malaysians bought around 315,000 motorcycles of all classes last year, with Honda and Yamaha machines leading sales with some 117,000 units and 103,000 units respectively.

The plant was earlier opened by Prime Minister Mahathir Mohamad.

Mahathir said the price of the machine -- named the Kriss after the popular Malay dagger, keris -- was subject to government approval. But Modenas officials expect it to carry a price tag of less than 4,000 ringgit (US$1,600), slightly below similar sized machines in its class.

Modenas is a 600 million ringgit joint venture between two Malaysian companies and two Japanese partners. Malaysian automotive group Diversified Resources Bhd holds a 55 percent stake in the company and the federal investment agency Nasional Khazanah, 15 percent.

Kawasaki Heavy Industries Ltd holds a 19 percent stake and Nissho Iwai the remaining 11 percent.

Modenas officials said the 70-acre plant will eventually be expanded to 170 acres, with plans to export the motorcycle to China, Vietnam, Cambodia as well as Latin American and African countries.

Yahaya said the joint venture agreement with Kawasaki allows Modenas to export the machines without any restrictions.

Mahathir said the project was a big step forward for Malaysia's plan to become an industrialized nation, with Kawasaki proving to be willing to transfer its technology.

Malaysia has previously complained that its partner in the Malaysian national car project, Mitsubishi Motors Corp was reluctant to transfer its technology.

"Kawasaki is very much prepared to transfer technology, to help, to train," Mahathir said.