According to the second international trade and industry minister Datuk Seri Ong Ka Chuan. Zhejiang Geely plans to use Malaysia as a hub to assemble Volvo cars for the ASEAN market by 2022. In the report by The Star, Ong said that while Volvo cars are already being sold in Malaysia, Geely does not have a sophisticated plant in the country to produce them.

“They plan to do it in a big way – ASEAN has a population of approximately 620 million and it’s a big market,” he said, adding it is a good strategy to assemble the cars in Malaysia and sell them to such a large market.

He revealed that Geely will be producing the cars in Tanjung Malim, which is where Proton currently has a plant. “They have to set up the factory within five years. It will be done in stages. They are now in the process of relocating operations. They will start building the plant next year,” he explained.

During the signing of the Proton-Geely FSP, it was suggested that Geely will use Proton’s Tanjung Malim plant (pictured below) to assemble Volvos and pay an assembly fee. At the time, DRB-Hicom did not disclose whether there would be any changes to local assembly of Volvo cars, saying that more details will be revealed following the signing of the definitive agreement before the end of July.

However, it should be noted that local assembly of Volvo vehicles has already existed in Malaysia for nearly five decades, with Volvo being the first carmaker to establish a vehicle assembly plant in Malaysia, where it was known as Swedish Motor Assemblies (SMA) from 1967 to the early 2010s.

The subsidiary company of Volvo Car (owned by Geely), now known as Volvo Car Manufacturing Malaysia (VCM), is currently headquartered in Shah Alam, where it produces the S60, V40, V60, XC60 and XC90. As a bit of trivia, Malaysia is the only other country in the world to produce the brand’s flagship SUV (XC90) outside of Sweden, where it is available in a T8 Twin Engine Inscription guise.

At present, Volvo’s local assembly operations has an output of 1,500 units, but the company said earlier this year that a RM20 million restructuring of its Shah Alam plant will allow it to eventually raise total production up to 5,000 cars a year. It is set to increase capacity by 50% this year, followed by another 50% next year.

Currently, VCM exports some of its production to Thailand, but will look to expand its exports to five new markets in the future. Among the targeted countries include Vietnam, Myanmar, Philippines, Indonesia and Taiwan – which as you can tell, some of which are ASEAN countries.

It certainly appears that the minister may have overlooked or may not be aware of the existence of VCM, which already has a sophisticated plant in the country to produce Volvo cars, as well as ongoing export operations. For the benefit of the doubt, Ong could be referring to an expansionary plan for local assembly of Volvo cars in the country.