Malaysia’s Tan Chong group has stepped up its efforts in the last few years to expand its regional footprint and cement its position as one of South-east Asia’s largest independent pan-regional vehicle distributors.

As the 2015 deadline for the establishment of the ASEAN Economic Community approaches, Tan Chong Group is a good example of an independent automotive company positioning itself for further growth in cross-boarder trade within south-east Asia.

The group has gone from strength to strength over the last five decades or so, since Nissan Motor first awarded the Tan brothers the exclusive right to distribute its cars in Malaysia in 1957.

Tan Chong has benefited fully from Malaysia’s rapid economic development and more recently by the growing business opportunities in neighbouring markets. It has expanded its core vehicle assembly, distribution and aftermarket operations over the years and has diversified into industrial equipment, property, finance and consumer products.

Today, the Kuala Lumpur-listed Tan Chong Motor Holdings Bhd consists of around fifty subsidiaries and joint ventures, including some of its operations in neighbouring ASEAN markets.

A second holding company, Tan Chong International Ltd and listed in Hong Kong, consolidates the rest of the group’s overseas operations, including vehicle distribution and component manufacturing in mainland China and vehicle assembly and distribution in Thailand.

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Tan Chong group currently has vehicle distribution and dealer operations in twelve countries across Asia, with a particularly strong focus on small emerging markets and niche brands.

Its core automotive business remains the assembly and distribution of Nissan Motors vehicles, which now spans six markets in Asia after the group expanded into Laos, Cambodia and Vietnam in 2010 and 2011, and into Myanmar earlier this year.

The largest Nissan operation is in Malaysia, the group’s original business, where close to 35,000 Nissans where sold last year. It also distributes Nissan vehicles in Singapore, although the market there has shrunk dramatically in the last several years.

Through its Motor Image distributor, Tan Chong is responsible for Subaru sales in Malaysia, Thailand, Vietnam, Cambodia, Singapore, Indonesia, Philippines, China, Taiwan and Hong Kong.

In October 2013, Mitsubishi Motors agreed to contract out assembly of its ASX crossover vehicle to Tan Chong Motor.

Its current vehicle assembly capacity in Malaysia is 65,000 units per year, expandable to 100,000 units with the addition of a third shift. It has vast experience in low-cost assembly and is rolling out this expertise into some of the smaller emerging markets in the ASEAN. It also has significant component manufacturing interests which help it meet local content requirements.

Tan Chong currently has assembly operations in Vietnam and Thailand. It plans to complete construction of a new assembly plant in Myanmar by 2015 and was able to call upon Malaysia’s APM Automotive Holdings, in which it is the largest shareholder, to build a local interior trim plant.

The company is clearly geared up to operating successfully on low volumes and helps its partners to operate in the smaller Asian markets and concentrate their resources in core markets elsewhere.

The risk is that as smaller markets in Asia become more mainstream over time, as demand increases, and as regional markets become more integrated, global vehicle manufactures may choose to implement their own regional production strategies.