KUALA LUMPUR Naza Group, Malaysia's No. 1 luxury vehicle importer, unveiled its first locally built compact car to take on Proton Holdings and Perodua, and said it will target overseas markets such as India, Britain and South Africa.
Naza will also spend an initial 570 million ringgit, or $156 million, on its third plant to produce more models.
"We expect Naza Sutera to outperform its class rivals and quickly gain popularity among young consumers," Naza's group chairman and founder, Nasimuddin Amin, said Friday. It will be a "world car built in Malaysia," he said.
Naza is challenging Malaysia's two biggest carmakers in one of the fastest growing segments of Southeast Asia's No. 1 passenger vehicle market, and plans to sell the new car abroad, reflecting a government call to lift export volumes.
Naza expects this year to sell 20,000 units of its Naza Sutera, a 1.1-liter car priced at between 35,998 ringgit and 36,998 ringgit, the company said. The model, which took two years to develop, will compete with Proton Holdings' 1.2- liter Savvy car, priced at more than 37,000 ringgit, and with Perodua, which sells compact cars as low as 27,607 ringgit.
Proton, Malaysia's biggest carmaker, is controlled by state-owned Khazanah Nasional. Perodua, or Perusahaan Otomobil Kedua, is the second national car company and is 38 percent owned by UMW Holdings, an assembler of Toyota Motor vehicles.
Malaysia's government last month cut import taxes for vehicles made in Southeast Asia and said incentives such as cheap loans and research and development grants would be offered to carmakers which use the nation as an automotive hub and geared for exports.
More than 500,000 vehicles are sold annually in Malaysia, with 90 percent manufactured or assembled domestically, according to government figures. Vehicle sales may rise 2.5 percent in 2006, the slowest pace in three years, as stricter lending and higher interest rates curb demand, the Malaysian Automotive Association said in January.
Naza has signed dealership agreements to sell the Naza Sutera, originally designed by Italian car designer Pininfarina, to 11 countries, including Pakistan, Nepal, Singapore, Bangladesh, Brunei, Sri Lanka, Malta and Cyprus, the company said.
Naza is spending 570 million ringgit on the first phase of a new plant in Penang state. When fully completed at a cost of 1.3 billion ringgit, the plant will have an annual production capacity of 100,000 units, the state news agency Bernama reported. Commercial production will begin in 2008, the report said.
Naza owns a 300 million ringgit plant in the northern state of Kedah, where it assembles vehicles for Kia Motors.