Changan Berjaya Auto, a subsidiary of Malaysia’s Berjaya, launched two (right hand drive) new budget priced passenger vehicles in the country on Monday sourced from China’s Changan Automobile.

The company also said it is preparing to start local assembly soon.

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“A decision is expected to be made in the next 18 months”, Changan Berjaya executive director Datuk Francis Lee told reporters during the launch of the Chana Era CV6 subcompact car and the Era CM8 compact MPV [minivan].

The company is expected initially to sell imported models to establish its market presence, but eventually it plans to make the vehicles locally for sale domestically and for export.

“We have reengineered and refined the cars with 40% of local content,” said CEO Datuk Tony Khor.

Exports are key to not only developing adequate economies of scale but also in gaining approval from the Malaysian government.

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“The Malaysian government is reluctant to allow Chinese vehicle manufacturers to expand into the Malaysia market without a strong export strategy”, said Affin Securities auto analyst Chong Lee Lin.

The new plant is understood to be close to completion and the company would look to produce a minimum of 10,000-15,000 units per year, for sale mostly in the major ASEAN right hand drive markets such as Malaysia, Thailand and Indonesia, and also in markets further afield including Sri Lanka and South Africa. Changan Berjaya plans to launch the cars in Thailand and Indonesia over the coming months.

In 2009, Changan Berjaya hopes to sell 10,000 units in the region, including 5,000 in Malaysia. Its models are positioned at the budget end of the market, with CV6 prices starting at around US$10,500.

Tony Pugliese