Naza to bulid Peugeot 206 for ASEAN market

Naza to bulid Peugeot 206 for ASEAN market

Associated Press, Kuala Lumpur

Malaysian auto company Naza Corp. on Wednesday sealed an
agreement with France's Peugeot S.A. to assemble the popular
Peugeot 206 model for Southeast Asia's rapidly expanding auto
market.

Naza will produce up to 50,000 units of the car from 2006 to
2010 to be sold in Malaysia and for export to Indonesia and
Thailand, it said in a statement.

Production of the 1.4-liter engine car will begin next year at
Naza's assembly plant in northern Kedah state and may be shifted
to its second plant in Penang island when the factory is ready in
2007, Naza said.

Naza didn't reveal the amount of investment needed for the
venture. It said the Peugeot 206, a highly popular model with
more than 5 million units sold worldwide, will be distributed
under the Naza brand in Malaysia.

The local version of the Peugeot 206 will compete with other
small cars produced locally by Malaysian national carmakers,
Proton and Perodua.

Both companies launched similar capacity compact cars earlier
this year. Perodua said last month it has sold more than 50,000
units of its 1- liter or 1.3-liter Myvi, but sales of Proton's
new Savvy have been far more modest.

The tie-up with Peugeot is part of Naza's preparation for
foreign competition when Malaysia's auto sector is liberalized
under the Association of Southeast Asian Nations' Free Trade Area
agreement.

Malaysia is Southeast Asia's biggest passenger car market,
with over 400,000 new cars sold each year. The government is
expected to unveil a new auto tax structure this month that could
see a lowering of import tariffs as part of its obligation under
ASEAN's free trade pact.

Naza is owned by prominent Malaysian tycoon Nasimuddin Amin
and began operations in 1976.