Malaysian vehicle distributor Bermaz Auto (BAuto) announced it had signed an agreement with Kia Corporation to assemble and sell its vehicles.

The new partnership follows the termination of the Kia sales and distribution agreement with the local Naza Group towards the end of last year. Naza is now reviving Suzuki in Malaysia instead.

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BAuto said it had agreed to establish a joint venture with the South Korean automaker, called Kia Malaysia, which will assemble vehicles from imported completely knocked down (CKD) kits.

BAuto said it would take a 33.3% stake in the new company and was expected to contribute one of its assembly plants while Kia would own the remaining 66.7% of the equity and invest in the manufacturing infrastructure.

The first model, the recently full redesigned Carnival MPV, is expected to be produced from the fourth quarter of 2021, followed soon after by the Seltos compact MPV. BAuto also said the joint venture plant would export vehicles to other markets in south east Asia and further afield.

BAuto subsidiary Dinamikjaya Motors would take charge of vehicle distribution and spare parts. The company would also be responsible for aftersales services which is expected to be significant given that 45,000 Kia vehicles have been sold in the country in the last 10 years.

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BAuto said in a statement: “With BAuto’s proven capability in successfully building up automotive marques in Malaysia and the Philippines, as well as its automotive manufacturing experience, we believe the Kia brand has been placed in good hands under the guidance of executive chairman Datuk Seri Ben Yeoh.”

Local analysts expect BAuto to sell 2,500 Kia vehicles in Malaysia next year, rising to 7,000 units by 2023. The brand is expected to eventually supplant Mazda as its main passenger vehicle marque which sold close to 12,000 vehicles last year.