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.