Pekan auto park could help boost TIV to one million units by 2020

By THE STAR | 22 February 2016

PEKAN: The development and growth potential of the Pekan Automotive Park can be steered to cater to the country’s growing total industry volume (TIV) which is set to hit one million units by 2020, says an industry observer.

The park, located within Pekan, is a 217ha industrial zone focused on high value-added manufacturing, with special emphasis on producing premium and alternative technology vehicles.

The observer pointed out that the Malaysia Automotive Institute (MAI) has projected TIV to reach one million units by 2020.

“Malaysia is expected to be a developed nation status by 2020. With the growing population and growing income per capita, there will be steady growth in TIV. Whether or not we can hit one million, is difficult to say.

“But TIV will continue to grow annually, and a need for an automotive hub, like the Pekan park, is crucial to meet this demand.”

A view of the DRB-Hicom facilities in Pekan. It is becoming the automative capital of the country.
A view of the DRB-Hicom facilities in Pekan. It is becoming the automotive capital of the country.

According to the Malaysian Automotive Association (MAA), the automotive industry has been growing for six consecutive years since 2010, peaking at a new all time TIV high of 666,674 units last year.

However, due to subdued consumer sentiment, a sluggish economy, weaker ringgit and tighter lending requirements, the MAA has forecast TIV to drop by 2.5% to 650,000 units in 2016 against last year.

According to the East Coast Economic Region Development Council (ECERDC), the Pekan park is expected to become a national and regional hub for car assembly, manufacturing of automotive parts and components, as well as automotive research and development activities.

Based on reports, some RM4.5bil is expected to be generated in investments throughout its three stages of development, with a total of 10,580 jobs to be created. It was expected to contribute RM12bil to the Gross National Income by 2015.

According to the ECERDC, the expansion of the park is scheduled for completion in 2020 and will result in a dedicated industrial zone, a National Automotive Centre, integrated vendors park, as well as a residential and commercial zone.

“By 2020, the Pekan park is envisaged to be an Asean automotive hub with emphasis on sustainability, both economically and ecologically,” says the ECERDC on its website,’ quoting its chief executive officer Datuk Jebasingam Issace John.

The industrial park will adopt environmental-friendly practices designed to reduce carbon dioxide emissions.

Among the automotive players that the park has attracted are Isuzu Hicom Malaysia, DRB-Hicom Defence Technologies (Deftech), Mercedes-Benz Malaysia and Suzuki, among others, with DRB-Hicom Bhd being the anchor tenant in the park.

DRB-Hicom set up the International College of Automotive to train skilled labour for the automotive companies.

The college was recently upgraded to university status and renamed DRB-HICOM University of Automotive Malaysia. Its first chancellor is Tengku Mahkota Pahang Tengku Abdullah.

March 2012 saw the first locally assembled Volkswagen Passat leave the line in what was described as a milestone in the history of the country’s automotive industry.

The production of the Passat was a result of a collaboration between Volkswagen and DRB-Hicom. Based on reports, the tie-up, which was established in December 2010, created over 3,000 jobs for the people in Pekan and brought in RM1bil worth of investments in four years.