Naza to surrender Kia, Peugeot dealerships
The Naza Group has been closely associated with Kia and Peugeot cars in Malaysia for many years. Recently, the Naza Group is outwardly planning to surrender its Kia and Peugeot distributorships which will eventually end that partnership. The decision could be due to the worsening soft automotive market by the Covid-19 pandemic. In fact, Naza Malaysia has invested a lot in growing both brands over the years. As such, it has created an extensive retail network all over the country. However, the past few years these two brands have seen a drastic drop in sales volumes.
Speculations on such a move have been fermenting for months. Rumours surrounding the Kia and Peugeot takeover began when Bermaz Auto CEO Datuk Francis Lee commented that the company was planning to expand its franchise portfolio. By looking between the words, Kia could possibly be the new car franchise under Bermaz Auto.
Sources said that Bermaz Auto, which presently handles the Mazda model within the nation, is the front runner to take over both brands. Bermaz Auto is not the only interested party as other competitors such as Sime Darby Motors and Berjaya Group are also keen on taking over the two brands. Berjaya Group previously held the local Mazda franchise under Berjaya Auto. In 2016, the entity became Bermaz Auto following a management buyout.
Adding to the speculations, reliable sources unveiled that Naza Malaysia has already sold its Kia branches to its dealers. Moreover, a former top executive of a big local fund is also working on the project to get rid of the Kia franchise.
Kia and Peugeot have seen a drastic drop in sales volumes in recent years.
The ongoing uncertainties over the potential take-over
However, the rumoured change of distributorship will still require approval from the respective brands’ principals. Moreover, it is still unclear if the Naza Automotive Manufacturing plant in Gurun – which assembles Kia and Peugeot models – will be included in this deal, due to a previous joint venture deal between Naza and Groupe PSA. And there will be the question of whether Naza will remain involved in the brands as a dealer chain. Incidentally, it also handles the Citroen and DS brands which are from the PSA Group but sell in very small volumes.
Background of Bermaz Auto Malaysia
Bermaz Auto started off with the Mazda business 12 years ago. It has successfully made it a successful brand with a proud record of growth in volumes. Apart from that, the team at Bermaz Auto also successfully built up the Hyundai brand in the 2000s under Hyumal. Sime Darby Motors then took over the Korean brand.
Background of Naza Kia Malaysia Sdn Bhd
Naza Kia Malaysia Sdn Bhd was chosen as the official distributor for Kia in the late 1990s. Soon after that, the company began assembling some of the Kia models at its Gurun plant. The first Kia model being assembled was the Spectra in 2001. On the other hand, Peugeot appointed Nasim Sdn Bhd as the official distributor of Peugeot vehicles in Malaysia in January 2008.
Aside from Kia and Peugeot, Naza Group also holds the distributorship for Citroen and DS, Maserati, Ferrari and Ducati, among others. Earlier this year, Naza Group said plans were underway to reintroduce the Suzuki brand in Malaysia.
Potential challenges that Bermaz Auto will face
Firstly, Bermaz Auto does not have its own assembly plant. At present, the company needs to rely solely on the Mazda Malaysia facility within the Inokom manufacturing complex in Kedah for the assembly of its Mazda models. Hence, the company will be in a dire need of a local assembly plant if it wants to grow in Malaysia. Moreover, it would be fascinating to observe how the company will handle both brands on top of distributing Mazda cars.
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