Stellantis and Malaysia. It all started in late 2021 when the giant auto group – the result of the Fiat Chrysler Automobiles and Groupe PSA merger – secured full ownership of Naza Automotive Manufacturing (NAM) and its manufacturing plant in Gurun, Kedah.
It was hailed as a major milestone for the company in our region, and Stellantis planned to ‘invest and dramatically expand its footprint as part of a robust localisation strategy’ in Malaysia to leverage its new asset. In late 2023, Stellantis took over sales and distribution of Peugeot vehicles from Bermaz with a new national sales company (NSC).
Stellantis Malaysia started operations in March 2024 and the new entity launched the Peugeot 408 the following month, promising 30 dealers by the end of 2024. Signing up household name Cycle & Carriage was notable, but one might argue that with the principal directly managing both production and operations in the country, Stellantis should have a larger presence in the market.
The group’s main brand in Malaysia has always been Peugeot, but as we learned from a chat with Stellantis ASEAN MD Isaac Yeo, the lion brand from France will take a back seat for the time being, making way for Chinese brand Leapmotor to spearhead the search for volume.
Last year, Stellantis and Leapmotor announced the formation of a joint venture (Leapmotor International, 51:49 led by Stellantis) following the group’s 2023 investment of around 1.5 billion euros for a 21% stake in Leapmotor.
Basically, with this new JV, Stellantis will be bringing Leapmotor products to the world. Leapmotor’s cars are ‘focused on the volume-centric segments at competitive price’, giving Stellantis something else to sell, something it does not currently have in its portfolio.
This applies to Malaysia too. What Peugeot does not have, Leapmotor has. “Complexity is our strength. Different brands will give you different products at different times. Every three to five years (there’s a) new model change, new generation change. As that happens, when I have different brands at different price positioning, it allows me to position myself strongly at different times,” Yeo told paultan.org.
The Stellantis regional chief says that Peugeot is going through a generational change now, admitting that the brand does not have the right products at the right price for our fast-changing market, which of late has been swamped by Chinese brands offering more kit for the money, altering our judgement when it comes to ‘value’.
“We’re going through a generational change now at Peugeot. This current generation of products used to be selling at RM150k to RM180k, it has now come down. Why? Because it’s an older generation, and there’s new competitors with new specs (for Malaysia), so naturally we have to evolve.
“But my new products that will be launched in Europe, the cost basis is a bit high. I’m trying to bring the cost basis down, CKD in Malaysia like what we still do, and that will take a bit of time. And that’s why I’m coming in with Leapmotor,” Yeo said.
“It’s one of the strongest upcoming brands in China. Today, the market in Malaysia is being strongly affected by Chinese brands – price, positioning, product, specs. In the past, when we see an auto tailgate or electric seats, that’s not basic, that’s something I want and I’m going to pay for it. Today, it’s different, it’s a basic standard feature – your want has become a basic need. And this is what Chinese products bring to us,” he illustrated.
“And that’s why strategically we went in with Leapmotor. Because cost basis, product wise – today the C10 is selling at RM125k – it’s a very strong value for money proposition. This is where we see European manufacturers playing catch-up, but we have Leapmotor in our arsenal, which I can in a certain way, keep up with the market demand. I cannot catch-up so quick, but I can keep them within sight,” Yeo said of Leapmotor.
The forthright ASEAN boss made it very clear that Leapmotor will be Stellantis’ top striker for now, the player to ‘lead the line’ and get the goals that will keep the company in the game (all football terms are our own words). But beyond the immediate future, Peugeot is still very much in the group’s ASEAN plans; in fact, Stellantis is working on models that will suit our region better, both in product and cost-wise.
“We’re now rebuilding the whole product lineup for Peugeot, we’re now moving towards the next generation. This year, we’re still selling the 3008 and some of the older models; we’ll most probably push this car at a very competitive price. We’ll come back soon with the next generation. But it’s going to take me a bit of time, because I’m using European costing coming down into ASEAN,” Yeo said, declining to share a timeline.
He admits that Peugeot’s cost structure is too high for the cars to be competitive in today’s market, and scaling down, for now, is the right option. “If I’m not there (the right product-price), I’m not going to force it. It’s painful but we will need to slow down,” he said. To solve this cost issue, Stellantis is working on ASEAN sourcing and to increase supply of local parts “to be relevant again”.
Yeo used the word ‘relevant’ many times in our hour-long interview and one gets the sense that for Stellantis Malaysia, the main goal now is to stay in the game, with hopes resting on the shoulders of their new Chinese striker. “We use Leapmotor to stay relevant in the market,” Yeo declared.
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