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Sime Darby Motors has signed agreements to take over the distribution of BMW and MINI in Vietnam, according to Bernama. Its Sime Singapore Ltd subsidiary is buying 89.15% of Europe Automobiles Corp Holdings Pte Ltd (EACH) for RM93.73 million, and 16.02% of Europe Automobiles Corp (EAC) for RM20.22 million.

EACH holds 82.98% of EAC, which has the distribution rights in Vietnam. The buys are expected to be completed by November 8, subject to BMW Asia Pte Ltd’s and BMW AG’s approval.

“As a major regional automotive group, we have been exploring expansion opportunities in new markets and Vietnam has proven to be an exciting one for us with the burgeoning affluence of its population,” said Sime Darby Motors MD Datuk Lawrence Lee. “This deal gives us an immediate foothold in the Vietnamese automotive market.”

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The International Monetary Fund expects Vietnam’s economy to grow 5.3% this year, up from 5.2% last year. The total industry volume took a 28% dive last year to around 79,000 units, but the Vietnamese government has introduced initiatives to help the automotive industry recover, reports Bernama.

“Vietnam holds promise in the long term. Its car-to-population ratio is still low at 18/1000 compared with Southeast Asia’s average of 80-150/1000,” said Lee. “In addition, demand for imported vehicles is expected to increase with the upcoming tariff revisions under the Asean Free Trade Area agreement.”

Tan Chong, via its wholly owned subsidiary TCIE Vietnam Pte Ltd, launched the Nissan Sunny (Almera) in the country earlier this year. The B-segment sedan is assembled at the new TCIE Vietnam facility in Da Nang (Tan Chong’s first car plant outside Malaysia).

A number of automakers have set up – or are in the process of setting up – local assembly facilities in Vietnam, and these include MazdaSuzuki and Chery.