Volkswagen LogoVolkswagen AG will be remodelling the group’s wholesale operations in Malaysia through Volkswagen Group Malaysia, as the initial plans for the group to tie up with Proton in a strategic stakeholding failed.

“Following the recent developments in the Proton-Volkswagen discussions and the Malaysian Government’s announcement, Volkswagen is currently reviewing its business strategy for Malaysia. Volkswagen considers the government’s counsel on this matter to be of utmost importance and value in ensuring the well-being of all Volkswagen local stakeholders, especially its customers. Volkswagen continues to believe in the potential of Malaysia’s automotive industry as well as the country’s continuously growing importance and influence in the region,” said Volkswagen in a statement.

From what I see, VGM could take two paths – one is to bring in CBU units through AFTA benefits from wherever they decide to place their regional plant, either Thailand or Indonesia, and the other would be to start up CKD assembly in Malaysia.

The last European manufacturer who looked into the CKD business here was Peugeot, and they seem to be happy with the standard of Naza Automotive Manufacturing’s plants up in Gurun, so that might be a good idea. Other choices include Inokom in Kulim, and Oriental Assemblers in Johor.