Indonesia could gain yet another production plant, as Renault intends to set up an assembly line there for a van model that was unnamed in the report by Reuters, but examples of vans that include the Toyota Avanza and Nissan Grand Livina leads me to believe this is a MPV type of model, something quite popular in Indonesia.
I wonder why Indonesia and not Malaysia, as it’s local partner Edaran Tan Chong Motor here has a plant (Tan Chong Motor Assemblers in Segambut) and is already assembling one Renault model – the Renault Kangoo, which you could say is somewhat like a van too. Renault’s Indonesian plant is expected to have an annual capacity of between 150,000 to 200,000 units.
Of course, the plans for the plant are there, the intention is strong, but everything is not confirmed yet, as Renault has just asked the Indonesian government for alist of investment incentives, of which if are satisfactory, an agreement will be signed in September this year.
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haha.. mayb they feel that their partner Edaran Tan Chong Motor not too aggressive for manufacturing the new car. Since the Teana and Tiida/Lation already launched many years ago but it just launch at m'sia recently..
"I wonder why Indonesia and not Malaysia, as it’s local partner Edaran Tan Chong Motor here has a plant (Tan Chong Motor Assemblers in Segambut) and is already assembling one Renault model – the Renault Kangoo, which you could say is somewhat like a van too. Renault’s Indonesian plant is expected to have an annual capacity of between 150,000 to 200,000 units."
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Maybe b'coz Malaysian business environtment are not really investors-friendly… hehehe… :)
NEP + AP + other non-sense crap = better do it in other ASEAN countries.
obviously cheaper labour…and most of their customer base is in indo anyway…mpv thr are hot cakes….
of course NEP lar. if you're boss, you want to setup in NEP place that give you lousy parts (because NEP, all the part supplier is lousy) or you want to setup in place where there's more quality parts? Malaysia is crap. Even assembling Honda car have a lot of problem because of NEP. NEP means lower quality.
run it on a commercial basis. nuff said.
IT has nothing to do with NEP. It is purely a strategic move, because Indonesia is a huge market for the Kangoo, especially, now that there's a diesel version which would be a perfect delivery vehicle in crowded places.
Secondly, Renault last year sold less than 20 cars in Indonesia and it feels that the economy has picked up to warrant some serious investment in this booming market.
Thirdly, granted that any vehicle maufactured in ASEAN will enjoy no import duties in any ASEAN market and thus, in theory, cars manufactured in Malaysia can make it to Indonesia. However, transport costs (they have to be shipped) and lack of efficient port services will negate whatever benefit of importing from Malaysia. Thailand is diffferent, because CBU units can be brougfht in by road or rail.
Fourthly, by investing in Indonesia, Renault will be in the good books of the govt and will be able to negotiate for perks, such as tax breaks etc.
Fifthly, Renault wants to build up it's brand in South East Asia, and would be able to ride together with the ever growing popularity of Nissan in this market.
They will enjoy economies of scale and lower labour cost.
And for the detractors: if you are Renault, would'nt you do the same?
No, if I'm Renault, I won't invest in Malaysia purely based on the fact there's NEP. Due to NEP all quality is low and the people is lazy. I will go to Indonesia where the people is cheap and they are more hardworking. Even the Malaysian company hire indonesian for construction. There you go. Because of NEP, less foreign investment. Good bye FDI. Malaysia economy will go down soon. Brace yourselves.
Good comment there by longjaafar. It based on the facts that Indonesia still a bigger market compared to Malaysia. Car market in malaysia is choking with everything under the sun and of course unfriendly price for the consumer.
magane ?
car maker are going to all our neighbour…
even F1 are too… soon… very soon if SEPANG didn't clean it up properly….
Bernie said SEPANG need to have proper maintenance….. continually…
ERm … y every one looks forward for indonesia market ?? it is G fault ?? the over Fxxx G Tax make ppl run away ??? i think so ….. Indonesia now low G tax for cars … n open biz for the outsider …. even our company Hitachi also have a factory at indonesia to build an Excavator ??? y ? …. our G still sleeping ?? only know to suck ppl tax ??? ….. malaysia nearly down … wait someday … malaysia no longer our citizen stay if the G keep gain those tax or price … the salary only G staft gain … but our citizen ??
if can search local news regarding tan chong, u know that Malaysia was the 1st choice b4 Indonesia. but the nep plan is delay 4 so long at that time. tan chong cant just sit there & wait 4 g announcement so eventually they move out. even until 2day there r still no clear nep plan announce. may b will announce during the coming budget. if not then no hope cos everything is so nontransparent.
TC have a new plant set up in Serendah and it is currently running the assembly of Tilda and Latio there. It have ample capacity to take in more models, but for renault models, Kangoo is not the most attractive model to come out from the parent company. Msian is not taking in this type of vehicle as a personal use vehicle, thus the model's failure.
Purchases will be great in indonesia ? I don't think so, not unless the model that renault intend to do is dirt cheap and attractive.
Can they produce a kangoo with the price of a Kancil? well, at least that's the price of avanza overthere..
Paul, why don't you ask local Renault guys? For once, do a proper reporting by interviewing them, rather than putting up question marks that will lead to rumours.
Rumour mongers are usually very old tarts. Are you one?
cheaper to manufacture there
longjaafar's comments are the most logical, but the NEP and NAP issue cannot be avoided.
Here's my take on this:
From an economic point of view, Indonesia seems to be the right place to set-up manufacturing for MPV products.
– lower cost of labour with good basic skills (vs the Bangladeshis that populate the automotive plants in Malaysia)
– very competitive raw materials cost
– better supplier network with probably higher quality (Toyota suppliers vs Proton suppliers)
– greater growth potential for the automotive market there (vs an over-supply situation here in Malaysia)
– Indonesia complies to AFTA 100%. Not the case with Malaysia – Thailand only just recently announced that they will accord Malaysian car exports the AFTA duties after much delay. But Indonesia still penalises Malaysian car exports with higher duties because of the non-tarif barries we have on their imports.
Then, there's good government support to attract automotive investments:
– the fact that the Indonesian government went to see Carlos GHOSN (the No1 man in the world automotive industry today!!) means they're serious and are willing to make things happen quickly.
– general incentives are already in place, but additional special incentives can be proposed and the Indonesian government are so willing to listen, consider and prepared to act upon.
Sometimes its not just the manufacturer's economic studies that determine where to invest, but local government intervention+support can push the decision to their favour. And Malaysia is losing out on this…..
The comments above missed out one essential thing. Malaysia has proton, and perodua, which are actually not really malaysian products, yet received great attention (or even maybe subsidy) frm the ruling government. Noone can compete that kinda arrangement.
While in indonesia, market is really competitive….and that turns renault on. VW has planned to set up plant there too
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