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Volkswagen Group Malaysia (VGM) MD Armin Keller also let slip during yesterday’s media briefing that the company is looking to export the Volkswagen Polo 1.6, Polo Sedan and Jetta – all of them locally-assembled at DRB-Hicom’s plant in Pekan – to countries around ASEAN beginning from next year.

Keller stated that these models now incorporate 40% local or ASEAN content, a requirement for cars assembled in ASEAN to gain import duty exemptions when exported to other countries in the region under the ASEAN Free Trade Area (AFTA) agreement.

Because the cars currently being produced in Pekan are right-hand drive, VGM is currently focusing on RHD countries such as Thailand and Indonesia. Keller, however, did not rule out producing left-hand drive cars for countries such as Vietnam and the Philippines if the business case “makes sense.”

2014 Volkswagen Polo Sedan CKD 29

Despite reports that Volkswagen has applied to set up an assembly plant in Thailand under the second phase of the country’s Eco Car scheme, Keller insisted that the automaker remains committed to Malaysia as its regional production hub. He added that while VW’s application has indeed been approved by Thailand, it has yet to make a decision on pushing ahead with the plan at this moment.

Keller maintains that DRB-Hicom remains a close partner for the region, saying that while Volkswagen does not hold ownership over the Pekan plant, it still has control over production levels, and that it has a number of its own personnel in the factory for training and assistance, making sure that the quality of the cars produced are up to par.

Volkswagen Jetta CKD 4

These comments add to recent developments that appear to strengthen Malaysia’s presence in the ASEAN region – Prime Minister Najib Tun Razak recently stated that Malaysia and Indonesia will be working on an ASEAN car project, although it is unclear if this is related to DRB-Hicom’s Asian Car project in which VW is involved in.

Currently, Proton, Perodua (which exports its cars to Indonesia badged as Daihatsu models), Hyundai, Mazda, Peugeot, Volvo and Subaru are exporting cars from Malaysia to other countries in the ASEAN region due to the favourable tax breaks.