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.