South Korea's Kia Motors and its Malaysian partner Naza Kia will launch four new car models next year mainly to take on national carmakers Proton and Perodua, a report said yesterday.
The four models included a one-liter car, similar to Kia's Picanto, and three higher-capacity models, the Financial Daily quoted sources as saying.
The source said the one-liter car may be marketed initially as a completely built-up unit before being assembled locally as a completely knocked down unit, so it could be priced lower than the 36,000 to 41,000 ringgit (US$9,474 to US$10,789) tag for the Kelisa model by second national carmaker Perodua.
The cars will be assembled at Naza's new 300 million ringgit plant in Gurun in northern Kedah state, which is expected to be completed next year, the source said.
Naza Kia's group managing director Nasimuddin SM Amin was quoted as saying the first of four new Kia car models to be launched would hit the market in the first quarter. He did not elaborate and company officials declined to comment when contacted.
Kia has said it aimed to produce 17 new vehicles before 2007, creating local assembly opportunities for Naza Kia, including small cars, mid-sized sedans, sports utility vehicles and multi-purpose vehicles, the report said.
Kia, which has no strong manufacturing presence in Southeast Asia, may use Malaysian partner Naza group's manufacturing plant in Gurun as its manufacturing base for the regional market, the source told the daily.
The Gurun plant will have a production capacity of 4,000 units next year, 25,000 units in 2005 and 45,000 units in 2008, the report said.
Currently, Naza Kia assembles Kia Spectra and national multi-purpose vehicle Naza Ria, a version of the Kia Carnival. Naza Ria was given the national status in July last year and launched in August.
Naza has introduced eight Kia models on the local market since it began marketing the Kia Sportage in 1996.
The group began operations in 1976 as an importer and trader of used and reconditioned cars but is now a full-fledged auto assembler.
It also has interests in the hospitality industry locally and abroad, and in public transport.
The move by Kia Motors Corp will add pressure to Proton and Perodua, as sales of national cars suffered amid intense competition from Japanese and South Korean rivals ahead of market liberalization under the ASEAN Free Trade Area (AFTA).
Under AFTA, tariffs on most products in the region fell below 5 percent in January but Malaysia has obtained a reprieve for its auto industry until 2005.
The government is expected to unveil by end of the year new excise duties on imported cars to replace the loss of revenue when import levies on these vehicles are reduced from Jan. 1.
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