The rumours that Bermaz Auto Berhad will take over the distributorship of the Kia and Peugeot brands is quite strong now, according to a report in the New Straits Times. The company started off with the Mazda business 12 years ago and has made it a successful brand with steady growth in volumes.
The Kia and Peugeot brands are presently handled by subsidiaries in the Naza Group, which also represents many other brands. It had previously established a relationship with Kia Motors in the 1990s, enabling it to begin volume sales rather than being just in the niche market it had started from in the mid-1970s. Although an agreement with Kia allowed Naza to brand some models under its own name, the strategy did not seem to be beneficial and the Naza brand slowly faded away.
The Peugeot brand came into Naza’s portfolio in 2008, after Cycle & Carriage Bintang decided not to continue handling it. While Bermaz Motor took over Mazda from C&C Bintang, Naza took Peugeot which was placed under Nasim Sdn Bhd. There were big plans for growth and development, especially since Naza had its own assembly plant in Kedah (which was acquired by the PSA Group a few years ago).
Naza has invested a lot in growing both brands and created quite an extensive retail network nationwide. However, the past few years have seen a dip in sales volumes and it also wasted 8 years with the Chevrolet brand that it stopped representing in 2018. The pandemic this year has only worsened things with the auto industry suffering a severe impact in the first half of the year.
The team at Bermaz Auto has a good track record, not just with the Mazda brand but also with the Hyundai brand which they successfully built up in the 2000s under Hyumal, before the Korean brand was taken over by Sime Darby Motors. Dato’ Sri Ben Yeoh, Executive Chairman of Bermaz Auto, is a veteran in the automotive industry with experience going back to the 1970s. He has worked with brands like Mercedes-Benz, Toyota, Daihatsu, Proton and Hyundai.
The track record of Bermaz Auto in building up Mazda after taking over would certainly impress Kia and Peugeot, giving an advantage over others who are also known to be interested in the brands. Positioning each brand in Bermaz Auto’s portfolio could be tricky though.
And there will be the question of whether Naza will remain involved in the brands as a dealer chain. Incidentally, it also handles the Citroen and DS brands which are from the PSA Group but sell in very small volumes. Bermaz Auto is unlikely to want to bother with these brands which would probably be tedious to manage anyway.
Bermaz Auto has no assembly plant of its own, relying on the Mazda Malaysia facility within the Inokom manufacturing complex in Kedah for the assembly of its Mazda models, some of which are exported. In order to grow any brand in Malaysia, local assembly is vital under current policies.
Peugeot would be okay since PSA continues to assemble the 3008 and 5008 for the Malaysian and exports markets but Kia assembly has pretty much stopped, with only 4 vehicles assembled this year (2,293 were assembled last year). If Bermaz Auto takes over Kia, it would want to assemble some models and would likely do so at the Inokom plant where Hyundai models are also being assembled.
Now that news of Bermaz Auto acquiring new business is getting so strong, we can expect that being a public-listed company, a statement will soon be forthcoming to provide clarification for shareholders.
