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In a strategic move that is set to reshape the landscape of the ASEAN automotive industry, Zhejiang Geely Holding Group Co Ltd is making a multi-billion-ringgit bet on Malaysia. This expansion plan, announced in August 2023, signifies a significant shift in Geely’s focus from Thailand to Malaysia, and it holds the promise of turning Tanjung Malim in Perak into the ASEAN region’s largest auto city. In this blog post, we delve into the details of this transformative decision and what it means for both Geely and the broader automotive market in Southeast Asia.
Geely’s Change of Course
Initially, Geely had plans to enter the Thai market with electric vehicles (EVs), but recent reports suggest that these plans have been put on hold in favor of a more substantial investment in Malaysia. This shift in focus is monumental and has captured the attention of industry specialists and automotive enthusiasts alike.
Proton’s Pivotal Role
The key to understanding Geely’s decision lies in its long-standing partnership with the Malaysian government through Proton Holdings Bhd. Proton has always aspired to become a hub for Geely, and this vision appears to be inching closer to reality. Prime Minister Datuk Seri Anwar Ibrahim’s announcement that Geely would invest $10 billion in Tanjung Malim underscores the significance of this partnership.
The Dynamics of ASEAN’s Automotive Industry
The automotive industry in the ASEAN region has historically been country-centric, with companies making investments based on individual country requirements. Geely’s decision to concentrate its efforts in Malaysia, given its established ties with the government and Proton, is a logical step towards expanding its footprint within this diverse market.
The Electric Vehicle Revolution
One of the driving forces behind this strategic move is the expected surge in demand for electric vehicles (EVs) in Malaysia, projected to become a significant segment of the local automotive industry starting in 2025. Geely’s investment in a new engine assembly plant and a body assembly line in Tanjung Malim has positioned Proton to assemble Geely-sourced EVs when the market demands it.
Incentives and Market Response
Geely’s choice to invest in Malaysia may be influenced by incentives offered through programs like the Automotive High-Technology Valley in Tanjung Malim. Additionally, Geely’s decision to rebadge its products as Protons for the domestic market ensures a substantial customer base and market share.
In conclusion, Geely’s billion-ringgit bet on Malaysia is more than just a shift in strategy; it’s a transformative move that has the potential to reshape the ASEAN automotive industry. With Proton as its partner, Geely is well-positioned to capitalize on the growing demand for EVs and take advantage of the incentives and market opportunities in Malaysia. As the automotive world gears up for the electric vehicle revolution, all eyes are on Geely and its visionary expansion plans in the heart of Southeast Asia.
Source : NST