Sime Darby to gain from BYD’s local assembly plan

Sime Darby is set to benefit from BYD's decision to partner with a local car assembly company, Inokom Corp Sdn Bhd, to produce electric vehicles (EVs) in Malaysia, according to CGS International. BYD has appointed Inokom, owned by South Korea's Hyundai Motor Company and Bermaz Auto Bhd, as its CKD (completely knocked-down) assembly partner at its Kulim plant in Kedah.

The MOU was signed in Shenzhen, China, last week. While production volumes are still to be confirmed, CGS sees the shift to contract assembly as positive for Sime Darby, given the potential for improved economies of scale at Inokom – with the capacity to produce up to 80,000 units annually, at an 80% utilisation rate. Sime Darby has been BYD's official distributor in Malaysia since 2022.

BYD's contract assembly move follows its withdrawal from plans to build a plant in Tanjung Malim, Perak, which would have produced up to 50,000 units a year, but faced stringent export and price requirements from the Ministry of Investment, Trade and Industry (Miti). Choosing contract assembly with Inokom means BYD will be exempt from these regulations and eligible for tax benefits until 2027.

This move is expected to bolster the sustainability and competitiveness of Sime Darby's BYD distribution business in Malaysia. By the end of the first half of this year, BYD had sold over 35,000 vehicles in Malaysia, including more than 7,500 in the H1.