Peugeot 206 to be Assembled Locally

MBf-Peugeot has announced that it will begin local assembly of the Peugeot 206 by the end of 2001. The news is not unexpected as the company had already been in discussion with Peugeot since before the introduction of the model six months ago.

Since its launch here, the 206, which has a 1.4-litre engine and automatic transmission, has met with exceptionally good response, partly due to its RM84,000 pricetag. Order one now and you may have to wait many months for delivery because demand worldwide is also high.

According to a source at MBf-Peugeot, the needs of the Malaysian market were not included for 2000 and those cars which are being sold here have been ‘hijacked’ from allocations to Australia. But production in France is now taking into consideration Malaysian demand and the waiting period should be shorter in the near future.

At present, the only factory assembling the 206 outside France is in Brazil with assembly in Iran to commence soon. Because such a CKD program exists, it has been easy to also establish a local assembly plan for Malaysia.

MBf-Peugeot uses two plants in Malaysia to assemble Peugeot cars – Oriental Assemblers in Johor and Tan Chong Motor Assemblers in Kuala Lumpur. With the recent DRB-Honda-Oriental joint-venture and plan to establish a factory to build Hondas in future, Oriental Assemblers is likely to be converted to make components. However, a senior executive of the plant said that there was no intention to give up contract assembly of Peugeot and Mercedes-Benz cars. Given the spare capacity that may result from the likely cessation of Honda assembly at OA, that plant may be the one to assemble the 206.

Peugeot has no strategic plans to exploit AFTA in 2005 but if the 206 program in Malaysia is successful, it is possible that the company may review its somewhat indifferent attitude and increase output with a view of supplying to other ASEAN countries.