This article first appeared in The Edge Malaysia Weekly on September 5, 2022 - September 11, 2022
SIME Darby Motors Sdn Bhd, the automotive arm of Sime Darby Bhd, is believed to be bringing in 2,000 units of Shenzhen, China-based BYD Co’s electric cars into Malaysia by the end of this year, and another 10,000 units next year.
Bringing in BYD’s electric cars that are much cheaper than the likes of Tesla, and those electric models sold by BMW, Mercedes-Benz and Volvo, could jumpstart the adoption of electric vehicles (EVs) in the country, as more people would then be able to afford one.
In a response to The Edge’s queries about the move, Sime Darby confirms preliminary talks with BYD, and that these are still ongoing.
“We are in initial discussions with BYD, which are ongoing. Should there be pertinent developments, this will be announced as and when appropriate,” the group said.
“Sime Darby Motors continues to grow our line-up of EVs via our partnerships with global brands. Besides BMW, other EVs in our portfolio include the Hyundai Ioniq 5, Hyundai Kona EV, Porsche Taycan and Volvo XC40, with many other models in the pipeline.
“EV sales remain encouraging and we continue to see an increase, with orders outstripping allocation,” the group said in the statement.
It is not clear whether Sime Darby Motors will be bringing in the units directly from China, or whether they will be sourced from other countries. This is because BYD is reported to have entered into a partnership with a Thai company for the distribution of its cars in the kingdom.
In early August, BYD appointed Rever Automotive as its local distributor in Thailand. The website dedicated to automotive news paultan.com says that the Pornprapha Group, which Rever is a part of, will invest more than THB3 billion (RM366 million) in the first two years to distribute and service BYD.
The website says that the aim is for BYD to have 31 dealerships with sales and after-sales service centres across Thailand by the end of this year, before increasing the network to around 60 to 70 locations by next year.
Earlier in April, Australian automotive website The Driven reported that BYD was preparing to set up a new manufacturing plant in Thailand, where it will make electric cars for right-hand-drive markets. Malaysia is a right-hand-drive market, alongside the UK and Australia.
It is likely that the Atto 3 electric compact SUV will be chosen as the first model, given the market’s affinity for sports utility vehicles, or SUVs. The Atto 3 is also the first BYD EV model sold in Australia, and is expected to also be the first model in Thailand.
The model is sold at just under A$45,000 on-the-road including insurance, which makes it the most affordable electric car in Australia. At that level, the Atto 3 is priced at around RM137,000, which is at the level of the Mazda CX5, Toyota Corolla Cross and Nissan X-Trail.
Currently, the cheapest electric SUV in Malaysia is the Hyundai Kona Electric, which is priced starting from RM156,000. The Volvo XC40 Pure Electric is priced at around RM262,000, while the Kia EV6 costs about RM300,000.
If Sime Darby were to bring in 10,000 units of BYD EVs by next year and sell them here, that is already a very good level for local assembly to be done. Sime Darby owns the Inokom assembly plant in Kulim, Kedah, which assembles models from BMW, MINI, Hyundai, Kia, Mazda and Porsche.
The Inokom assembly plant has a capacity to produce 38,000 units a year, according to Sime Darby’s website. The site still has ample room for expansion, as the current facility only takes up around 51% of the 200-acre site.
Sime Darby also owns and operates the Sime Darby Auto Engineering (SDAE) engine assembly plant, where it assembles engines from BMW. SDAE has the capacity to produce up to 10,000 engines a year.
If Sime Darby is indeed planning to locally-assemble BYD EV models, it has to compete with Thailand to get the contract. BYD is not currently represented by Sime Darby, nor does it have an assembly contract or plant in Thailand.
However, Rever is already mulling a local assembly of BYD EVs that it is bringing in to Thailand. As such, it remains to be seen whether BYD will be making Thailand its assembly hub in this region.
Sime Darby is pushing the development of EV infrastructure in the country. In early August, the group said that it has identified locations for EV charging stations at every 200km to 300km along highways across Peninsular Malaysia to ensure all high-density areas are in range of charging stations.
The group is partnering TNBX Sdn Bhd, a subsidiary of Tenaga Nasional Bhd, through TNBX’s e-mobility app GO TO-U, which would give Sime Darby Motors EV owners the convenience of pre-booking its EV charging stations through the app.
On Aug 17, Sime Darby’s managing director Andrew Basham said that the group is expecting that its sales of EVs will increase from the 3,000 units sold as at June 30, 2022. He said that the group is working with organisations that are trying to ramp up the production of EVs.
“The organisations we are working with are trying to ramp up the production of EVs, so we will see the sales figure of EVs increase in the next financial year, especially in Hong Kong,” said Basham, without naming them.
Revenue from the sale of EVs only makes up around 4.5% of Sime Darby Motors’ revenue, according to Basham. For the financial year ended June 30, 2022 (FY2022), Sime Darby’s motor revenue came in at RM27.35 billion, slightly lower than the RM28.25 billion recorded in FY2021.
China made up 49% of Sime Darby’s motor division revenue in FY2022, while Malaysia contributed 17.1%.
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