Geely Holding Group, China's biggest privately owned carmaker, will start
assembling cars in Indonesia after an initial plan to produce them in Malaysia
was rejected by the government in Kuala Lumpur.
Geely will assemble its 1.1-litre, 1.3-litre and 1.5-litre cars in a plant
near Jakarta and begin selling them in November, said Cam Soh Thiam Hong, group
executive chairman of Alado, the Malaysian sole distributor of Geely cars in
Southeast Asia.
Malaysia allows foreign carmakers to assemble and sell vehicles in the
country if they are not directly competing with those made by state-held Proton
Holdings.
The policy benefits Indonesia, which offers incentives for foreign
investments and accelerates approvals to boost its economy, analysts say.
For Indonesia, "any foreign investment is good as it means more jobs and more
money for the government," said Erwan Teguh, head of research at Danareksa
Sekuritas.
Alado took only two weeks to obtain approval to sell Geely cars in Indonesia,
Mr Soh said. The company and its Indonesian partner, Indomobil Sukses
Internasional, began selling Chery's 0.8-litre engine cars in the country last
week, with the aim to sell 1,000 cars this year.
Geely, which will be the second Chinese carmaker to assemble cars in
Indonesia, plans to boost exports to 65 per cent of total sales by 2015.
Chery Automobile started last week to sell the cheapest cars in Indonesia.
"The Indonesian market is huge," Mr Soh said yesterday in Petaling Jaya, outside
Kuala Lumpur.
Alado "is in the final stage of concluding an agreement with an Indonesian
partner", he said, declining to elaborate.
The Malaysian government considers Geely a "direct competition to the
national car [Proton]," and would allow them to be assembled in the country only
for exports, Mr Soh said.
In Malaysia, the 0.8-litre Chery QQ AMT is being sold at slightly more than
M$41,000 (HK$86,661). The cheapest Proton model is the 1.3-litre Iswara, which
sells at about M$34,500.
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