Volvo Looks To Malaysia As Regional Production Hub

by under News on 14 Jun 2017 12:28:41 PM14 Jun 2017

Geely wasting no time capitalising on PROTON buy-in.

Volvo Looks To Malaysia As Regional Production Hub

Following the agreement between the Zhejiang Geely Group and PROTON, subsidiary company Volvo is set to look to Malaysia as its new manufacturing hub for the region, according to Malaysia’s second minister for International Trade and Industry, Mr. Ong Ka Chuan. 

Speaking to the media, Ong said that while Volvo has had a long presence in Malaysia, neither they nor parent company Geely have a manufacturing facility in the country, something that they will look to change as they move forward with plans to set up a new facility in Tanjung Malim, some two hours away from the Malaysian capital of Kuala Lumpur, where PROTON maintains an enormous manufacturing facility capable of assembling up to 1-million cars a year (but is currently only 15% utilised).

Volvo Looks To Malaysia As Regional Production Hub

“They plan to do it in a big way,” the minister said of Geely’s plans. “ASEAN has a population of approximately 620-million people, and it’s a big market. They have to set up the factory within five years – it will be done in stages. They are now in the process of relocating its operations, and they will start building the plant next year.” 

Geely currently maintains no less than 16-manufacturing plants and seven design studios across the globe, along with five R&D centres. While the ministers’ announcement of the future Volvo factory in Tanjung Malim is very exciting, it’s worth noting that it is slightly off the mark: Volvo has maintained a manufacturing facility in Malaysia for almost 50-years now, being the first carmaker to set up a manufacturing facility in the country in 1967, known then as ‘Swedish Motor Assemblies.’ 

Volvo Looks To Malaysia As Regional Production Hub

Since then, the company has since been renamed to Volvo Car Manufacturing Malaysia, and is notable for its capability to produce the complex Volvo XC90 T8 TwinEngine PHEV, the only facility outside of Sweden to do so. The Shah Alam manufacturing facility also produces the V40, S60, V60, and XC60.

Previously, Volvo Malaysia announced that it would be investing some RM20mil (or about $6.3mil) to improve its existing facilities, increasing its current production capacity from 1,500 cars to 5,000 cars a year. With the announcement of a new facility however, it is unclear of this affects the plans in place for the Shah Alam plant, though we have little doubt that the Tanjung Malim facility will be more advanced and sophisticated, and will make full use of its strategic logistical location. 

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