Hong Kong-listed Geely Automobile Holdings Ltd has signed a distribution agreement with Information Gateway Corporation (IGC) to sell the Chinese company’s passenger cars in Malaysia.

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IGC expects to take delivery of its first consignment of 3,000 completely built up (CBU) cars in September and a further 10,000 CBU imports are planned for 2006.


Putrajaya-based IG group, which shares the same executive chairman – Datuk Cam Soh Thiam Hong – with the country’s Alago Corporation, plans to complete construction of a car assembly plant in March 2006. It will have an initial capacity to assemble 30,000 units per year, according to company sources.


Alado Corporation had reached an agreement in late 2004 to assemble and sell Chery Automobile’s QQ model. But the pending intellectual property rights lawsuit brought against Chery Automobile by General Motors of the USA is understood to have delayed the QQs programme in Malaysia. Chery’s QQ model went into production in Iran late last year.


Geely Automobile Holding’s chairman Li Shu Fu told reporters in Hong Kong last month that his company plans to export 10,000 cars this year, including those destined for Malaysia. Last year, the company exported 4,846 cars, most of which were shipped to the Middle East. The company’s overall sales target for this year, including domestic sales, is set at 140,000 units. This represents a 24% increase on last year’s reported 120,000 vehicle sales. First quarter 2005 sales came to almost 30,000 units, according to reports, but sales have since weakened.

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Geely has a production capacity of 150,000 units per year, but this will be increased shortly. The company hopes eventually to sell two-thirds of its cars outside China, mostly to the Middle East and Africa and it sees Malaysia as a key export test market for the group. Competition in mainland China is getting tougher, with prices falling as capacity continues to rise.


Geely’s vice president, Zhao Jie, told local reporters that the Malaysian plant will make the company’s latest model – the 1.6-litre Freedom Cruiser, unveiled at the Shanghai Motor show in April. Two larger models will be introduced later on, he added.
The models to be imported as CBUs in September will be the Haoqing and Merrie models.


The IGC group plans to invest RM200 million in the plant, which will be located in Kuantan and employ 500 workers. With other ASEAN markets also in mind, the company expects to ramp up production capacity to 90,000 units within three years.


Tony Pugliese