After the neverending story with Proton, Volkswagen has finally inked a deal to produce cars in Malaysia.
Volkswagen will be working closely with Malaysia’s DRB Hicom, using its existing structures and capacities including a plant in Pekan. DRB Hicom currently owns the largest automotive production network in Malaysia and builds passenger cars and commercial vehicles at its plants in Pekan and Melaka.
Note that the cars built by Volkswagen in Malaysia will rely on Completely-Knocked-Down kits; essentially completed modules shipped from Germany and then pieced together to gain local production status. It’s a strategy that several other foreign automakers, including BMW and Mercedes-Benz, utilize to partially circumvent Malaysia’s ridiculously high tarrifs.