Malaysia's second national car maker, Perodua, could soon produce cars under the Daihatsu brand name to capture a bigger share of sales in South East Asia, AutoAsia Online reported.

Peodua presently builds small Daihatsu cars under its own brand for sale in home and export markets. Its tiny Nippa hatchback, based on the previous generation Daihatsu Cuore, is the cheapest new car on sale in Britain.

According to AutoAsia Online, Perodua managing director Datuk Abdul Rahman Omar said production of Daihatsu cars was possible following greater equity participation in his company by Daihatsu and the Japanese trading house Mitsui. The investment would result in Daihatsu gaining direct management control over Perodua's manufacturing arm and shareholders have signed a memorandum of understanding on the Japanese investment.

"Hopefully, Daihatsu will make use of our manufacturing facilities to produce Daihatsu cars for the ASEAN market. If this happens, the cars to be produced for the Malaysian market will use Perodua's brand name, and those for export markets Daihatsu's brand name," the Perodua MD told reporters, AutoAsia Online said.

"We may have to sacrifice national pride in not using Perodua's brand name, but the move will be good for us as we will need a higher production volume to compete when AFTA comes into effect in 2005," the Perodua MD added, according to AutoAsia Online. "It will also benefit our vendors as they will have bigger volumes to handle."

AutoAsia Online said Daihatsu and Mitsui would own 51 percent of the proposed joint venture with Peodua holding the remaining 49 percent. The new company, headed by a Daihatsu chief executive, will also acquire a 51 percent stake in Perodua's two wholly-owned manufacturing units, Perodua Manufacturing and Perodua Engine Manufacturing.

Rahman said that Perodua expected to raise output this year to 125,000 units from 101,582 in 2000, according to AutoAsia Online.



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