Naza confirms it’s letting go of Kia and Peugeot brands

Naza confirms it’s letting go of Kia and Peugeot brands

Previously, it was reported the Naza Group is planning to give up two brands under its automotive business wing, namely Kia and Peugeot. While there has been plenty of hearsay on the matter, we now have a better picture of what’s going on following a recent interview given by SM Nasarudin SM Nasimuddin, CEO of Naza Corp Holdings, to The Edge.

In the interview, Nasarudin said the decision to sell the group’s Kia and Peugeot businesses is part of a transformation plan to realign its business model for better sustainability. This plan was put together by him and his family members who are shareholders, and advised by a transformation committee as well as a major accounting firm.

“The group was built on the automotive business, but as we move forward, [the auto industry] is highly regulated; it requires a lot of investments. If I invest RM60 million to develop a CKD (completely-knocked down) model, whether I get returns, I don’t know. There are too many uncertainties in the market, and our principal will always want us to invest. So, to be fair to both parties, we told them we don’t think we want to do this anymore,” Nasarudin explained.

He also noted that the Covid-19 pandemic was the trigger for the group’s realignment, as it presented an opportunity to “reassess the group and make key decisions to move forward.” The pandemic has left a significant impact on the automotive industry, with the Malaysian Automotive Association (MAA) adjusting its total industry volume (TIV) forecast to 407,000 units from 607,000 units earlier in the year.

Naza confirms it’s letting go of Kia and Peugeot brands

The pandemic has certainly left its mark on the sales of Kia and Peugeot models in Malaysia. Referring to MAA’s most recent sales data, in the first nine months of 2020, Kia sold 635 units, while Peugeot sold 856 units. Compared to the same period last year, the former managed 2,890 units, while the latter saw 1,526 units sold.

In 2019, Kia sold a total 3,432 units, while Peugeot registered 1,897 units. This is contrast to 2015 when Kia sold 4,674 units and Peugeot 2,986 units, with subsequent years seeing progressive declines, even without the pandemic. There were some exceptions, with Peugeot recording a sales climb in 2017, when it and Kia benefitted from the three-month GST (goods and services tax) holiday in 2018.

With Kia and Peugeot set to be released by the Naza Group, several parties appear to be interested to take over these franchises. Previous reports have pinned Bermaz Auto (BAuto), which currently handles the Mazda brand in the country, as a front runner. A source told the publication, “BAuto is in discussions with a few parties, but the principals are also talking with many other parties. Among them are Sime Darby Motors and DRB-Hicom.”

However, Sime Darby CEO Datuk Jeffri Salim Davidson has openly said that there are no intentions to acquire the South Korean and French brands. “We are not looking [to take over] the distribution for Kia and Peugeot franchises in Malaysia. We don’t want it. But we are working with Bermaz Auto to locally assemble Kia cars at our plant in Kulim, Kedah,” he said.

Naza confirms it’s letting go of Kia and Peugeot brands

Sime Darby currently owns a majority stake in a plant in Kulim, which assembles BMW, Mazda, MINI and Hyundai vehicles. The plant is operated by Inokom Corp, which is also jointly owned by BAuto (29%), Hyundai Motor of South Korea (15%) and Hyundai-Sime Darby (5%).

When asked how he felt about reduced earnings from Naza Group’s automotive arm after it releases the Kia and Peugeot franchises, Nasarudin said they are also talking to some brands. “One or two want to come into the market, so we want to go back to the basics of trading,” he said.

“We have a long history with Kia and Peugeot. We are quite emotional about parting ways with them, but it has got to the point where, to be fair to both parties, we don’t feel the value in investing and we’re not going to see the returns that we want,” he added.

The Naza Group also operates higher-end brands, namely Ferrari and Maserati, with Nasarudin confirming both will be kept in the group’s portfolio. “That we will maintain. Those are somehow doing very, very well for us, and that is a profile we want to keep as well,” he said. Other brands under the group’s wing include Mercedes-Benz (NZ Wheels), Citroen and DS (Naza Euro Motors), Ducati (Next Bike) and Indian Motorcycle (Harmony Fabolous).

Naza confirms it’s letting go of Kia and Peugeot brands

The Naza Group’s involvement in the automotive industry isn’t just limited to consumer sales, as it also has a concession with the government as a fleet supplier, as announced earlier this year. “The DNA of the Naza Group is automotive, so even if we part ways with the likes of Kia or Peugeot, while it will take way significant revenue from the group, we can still be in the automotive business, bigger and stronger in other areas,” said Nasarudin.

The group also has a stake in Naza Automotive Manufacturing (NAM), which operates an assembly plant in Gurun, Kedah with an annual production capacity of 50,000 units and was set up at a cost of RM700 million.

Previously in February 2018, the PSA Group acquired a 56% majority stake in NAM, as part of plans for Malaysia to be the export hub for the ASEAN region. With Naza Group looking to offload Kia and Peugeot, there have been questions about what will happen to NAM, which is likely to have excess capacity and less than encouraging books.

Naza confirms it’s letting go of Kia and Peugeot brands

According to data from the Companies Commission of Malaysia (CCM), the PSA Group now has a larger 61.4% equity interest in NAM, with Naza Group’s stake reduced to 38.6%. As at end-2018, NAM suffered an after-tax loss of RM1.69 million on revenue of RM56.92 million.

Nasarudin says the profits in the subsequent years have a lot lower than 2018 due to razor-thin margins and a challenging landscape, where the Naza Group has little say in key decisions. “Margins are limited, and even pricing is determined by the principal, so there are a lot of risk factors,” he explains. This could see NAM being part of the group’s sale of key auto assets besides Kia and Peugeot.

“My goal is to have this whole transformation exercise finished by December this year, and [to have] until the first quarter of next year to really chart the way forward for the group. We need to craft out what is the investment strategy for the group moving forward. With all these divestments in place, we need to be selective of how we want to move the group forward,” said Nasarudin in conclusion.

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Gerard Lye

Originating from the corporate world with a background in finance and economics, Gerard’s strong love for cars led him to take the plunge into the automotive media industry. It was only then did he realise that there are more things to a car than just horsepower count.



  • vivizurianti on Nov 02, 2020 at 12:54 pm

    I pity them when existing owners are looking for replacement parts for their broken KIA and Peugeot.

    Like or Dislike: Thumb up 10 Thumb down 2
    • Troll Hunter on Nov 02, 2020 at 4:32 pm

      Someone was saying their cars are very good and super reliable because they are sold in over 200 countries or something, and they never breakdown….

      Like or Dislike: Thumb up 6 Thumb down 0
  • 4G63T DSM on Nov 02, 2020 at 1:08 pm

    Hmm… Once money is made time to exit the market.

    Nevermind forgetting where all that seed money came from.

    Just like most business you risk your capital to earn profits. Not everyone has an AP kingdom to fund you.

    Like or Dislike: Thumb up 10 Thumb down 0
  • Celup King on Nov 02, 2020 at 2:50 pm

    If kimchi has potential here, they would have taken back and run the distro themselves by now.

    Like or Dislike: Thumb up 7 Thumb down 2
  • YB Albert on Nov 02, 2020 at 3:19 pm

    Arnold Swazzernager once told a packed audience,if u want to be a worldclass must not only have the passion,but the focus.
    The dead tycoon’s untimely demise,left a giant automotive empire to his sons,who have lost focus for some time.They are more hands on with exotic cars and real estate development.
    Needless to narrate further,the Kia and Peugeot distributorship here dies a natural death.Other car distributors have the focus and overcome even the covid storm,to stay alive.
    Remember,those Chevrolet car owners have been left in a lurch by these young dudes who couldnt give a damn if your car is stuck with lack of spare parts.
    Anyway,it is better Bermaz Auto do due diligence whether to gobble up a half baked pie.It is unlikely Sime darby will take over a competing Korean brand,which is a half brother to Hyundai.

    Like or Dislike: Thumb up 19 Thumb down 0
    • Call me by your name on Nov 02, 2020 at 7:21 pm

      Arnold is still alive u idiot

      Like or Dislike: Thumb up 2 Thumb down 15
      • Shamelessly on Nov 03, 2020 at 6:13 pm

        Dude you are the real idiot not him. He is referring to the late founder of Naza. You are just making a fool out it yourself

        Like or Dislike: Thumb up 16 Thumb down 0
  • hondaman on Nov 02, 2020 at 3:52 pm

    the decline of KIA sales in Malaysia is because of poor after sales service by NAZA.

    Like or Dislike: Thumb up 38 Thumb down 1
  • Aiman Azri on Nov 02, 2020 at 4:55 pm

    Will we see a new revival kia in Malaysia?? I would like to see global model like seltos korea/aussie spec with 1.6 t-gdi like it’s cousin Kona and a new sorento with hybrid/ plug in hybrid powertrain. For small car like rio GT-Line and Cerato/K3 GT would be the best option. Would glad to see them soon..

    Like or Dislike: Thumb up 2 Thumb down 0
    • At these current prices? It doesn’t matter, sales will be zero.

      Like or Dislike: Thumb up 1 Thumb down 0
  • Naza =/= Automotove on Nov 02, 2020 at 5:35 pm

    Running an automotive company requires R&D. Ferarri & Maserati sales are just trading business, there is no assembly and profit margins are very high. This is why Naza cannot call themselves a full fledged automotive company due to the failures of running Kia & Peugeot business. Trading is getting free AP and selling it only.

    Like or Dislike: Thumb up 11 Thumb down 0
    • they did have R&D. tan sri nasimuddin has a vision to heve his own car company. alas all was wasted by nasarudin

      Like or Dislike: Thumb up 5 Thumb down 0
    • autobahn on Nov 02, 2020 at 7:03 pm

      Naza is a full fledged automotive company.. Msians get to enjoy cheap n reliable Naza Ria, Citra, Bestari, Forza & those Inokom i10s

      Like or Dislike: Thumb up 5 Thumb down 0
    • Maybe kah motor, which lost Honda franchise may consider returning,

      Like or Dislike: Thumb up 1 Thumb down 0
  • Malaysian on Nov 02, 2020 at 5:49 pm

    I think lower sales volume due to poor specs decisions and poor marketing. The product itself actually have good potential. In Brunei, we see more Kias than Hondas or Toyotas

    Like or Dislike: Thumb up 14 Thumb down 0
  • Anonymous on Nov 02, 2020 at 6:21 pm

    C’mon now… lets be truthful. Let’s make everyone understand.

    Simply put…. CKD business while providing slightly cheaper options to the consumer… is burdensome and harder to achieve ROI after initial investment.
    CBU business bring better margins with less investment. Ka-ching..!

    Like or Dislike: Thumb up 1 Thumb down 0
  • Peugeot can come in by themselves if we had honoured asean free trade agreement wrt motor vehicles due to proton protection. Under AFTA, cars assembled in asean should be tarrifs free. Because of this, other asean countries imposed similar trade restrictions to our cars.

    Like or Dislike: Thumb up 1 Thumb down 0
  • Jonn Dol on Nov 02, 2020 at 11:04 pm

    Peugeot has a very decent & avantgarde looking cars capable of taking on the German makes. A big shame if some other company is not taking it over from Naza.

    Like or Dislike: Thumb up 2 Thumb down 0
    • benard on Nov 03, 2020 at 10:55 am

      Peugeot Citroen as a partner is very unreliable. They wont give the best models to non europeans like us to assemble. Tan Sri Yahya was burned when he wanted the Saxo, but PSA just give them the AX which become the tiara, a model much older than even the original proton saga. Naza got the 206 and the sedan 207 which is just a facelifted 206, unlike the totally new 207 design in europe.

      Probably there will be no takers for Peugeot brand for now in Malaysia, just like Chevrolet, Suzuki, Skoda and many other brands before.

      Like or Dislike: Thumb up 4 Thumb down 0
  • sam123 on Nov 03, 2020 at 8:47 am

    hopefully KIA end up with Bermaz, the suzuki rumour still blowing wind

    Like or Dislike: Thumb up 1 Thumb down 0
  • Ruslan Bahari on Nov 03, 2020 at 8:50 am

    I suppose with Proton now on the way out of the woods, DRB will have some breathing space. They could really do with another brand under EON I guess. Mitsubishi seems strong for them, VW so so no thanks to a clueless principal. Audi? Another case of principals that seem unclear about CKD.

    Like or Dislike: Thumb up 1 Thumb down 0
  • NazaK on Nov 03, 2020 at 9:40 am

    The father was hardworking, while these 3 boys partied everything away…

    Like or Dislike: Thumb up 15 Thumb down 0
  • Just take away the APs and they will be nothing.

    Like or Dislike: Thumb up 3 Thumb down 0

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