Chery to set up RM2.2 billion Smart Auto Industrial Park

Chery, China’s leading vehicle exporter for 22 consecutive years, has picked Malaysia to set up another production base. This will be its 11th production base outside China and the first in Southeast Asia.

The new production base will be at the Chery Smart Auto Industrial Park to be located in the Beringin High-Tech Auto Valley (BHTAV) in Lembah Beringin in north Selangor. The automaker, which is now listed in the global Fortune 500, will invest RM2.2 billion in the project which is targeted for completion in 2026.

“Chery is proud to be an integral part of this visionary development, where we will establish state-of-the-art manufacturing facilities, integrate cutting-edge smart technologies, and produce an extensive range of vehicles – from internal combustion engine models to the latest in plug-in hybrid, battery electric with and energy-efficient vehicle technologies. We are confident that once completed it will create high-value job opportunities, house a cutting-edge R&D centre, expand vehicle exports to neighbouring countries, strengthen Selangor’s role through a robust supply chain, and solidify Malaysia’s position as a leading automotive hub in ASEAN,” said Chery International President, Zhang Guibing.

The BHTAV – located between the Perodua manufacturing complex near Rawang and Proton’s factory in Tg. Malim, Perak – is an 800-acre master-planned development by Legenda Beringin Holding Sdn Bhd.

First phase of BHTAV development
The Chery Smart Auto Industrial Park anchors the first phase development of the BHTAV ecosystem which will be developed in phases. Covering 200-acres, the industrial park aligns with the BHTAV’s phased vision of building integrated township that can attract talent, investment, and innovation, bringing world-class automotive manufacturing and cutting-edge technologies to Hulu Selangor.

The remaining land area will be allocated for other developments that supports the vision of building a leading hub for automotive innovation, supply chain, vocational training, and technological advancement in the region.

The development is highly significant for the Lembah Beringin area which held much promise in the early 1990s but due to the Asian Financial Crisis at the end of the decade, the development stopped. In 2001, the Ministry of Housing and Local Government classified Bandar Baru Lembah Beringin as an abandoned project.

The BHTAV will this bring this area back to life in coming years, with Chery certainly going to be one of the contributors to the development and growth. According to Mr. Zhang, up to 3,000 job opportunities could be created by its new plant. Additionally, as other companies in the supply chain set up their own factories in the industrial park, more employment opportunities will be created.

Changed regional trading conditions
While the government has long encouraged car companies in Malaysia to export vehicles, this has not occurred on a large scale. Part of the reason has been that the assembly plants have been set up in earlier to cater only to the Malaysian market as many of the automakers also have plants in neighbouring countries. This was because prior to the creation of the ASEAN Free Trade Area (AFTA), exports from one ASEAN country to another were not feasible as import taxes were high due to protectionist policies.

With the AFTA agreement becoming active 20 years ago, things have changed and with the region treated as a single market, exchanges of goods and services has been made duty-free. This has encouraged automakers to set up larger plants in each country with exports as part of the plan.

This will be the case with Chery’s new plant in BHTAV as the automaker plants to export some of the production to neighbouring countries. In fact, it has already started on a small scale with JAECOO SUVs assembled at its present plant in Shah Alam.

The new plant will have an initial production capacity of 100,000 vehicles per annum, scalable to 300,000 vehicles per annum.

When Chery began local assembly of its first models for the Malaysian market, it chose Inokom Corporation in Kedah to undertake assembly. The plant, owned by Sime Motors, currently assembles the Tiggo and OMODA SUV models, including the fully electric OMODA E5.

When asked if Chery would continue to use Inokom, Mr. Zhang said that they have had a very good relationship and he expects that Inokom will still be used for assembly of certain models in the long-term.

Contributing to socio-economic development
Chery’s billion-ringgit investment in Malaysia differs from other newcomers which have focussed on just assembling vehicles (and not all are doing so yet). In investing locally not only to assemble its products but also to contribute to socio-economic development of the country, Chery is following the approach it has taken in other countries, reflecting a ‘think global, act local’ philosophy.

When asked how Chery has been so successful overseas for over 20 years, Mr. Zhang said that the company does not just think of making its customers happy but also governments and society. In this way, Chery has become a welcome investor which has gained trust and support in the markets it operates in.

Chery to begin exporting vehicles from Malaysia this year