Malaysia launches new car project to jumpstart high-tech growth

KUALA LUMPUR (Reuters) - Malaysia launched a new mass market car project on Friday, as it looks to boost development and adoption of high technology in a renewed industrial push by Prime Minister Mahathir Mohamad.

Southeast Asia’s third-largest economy is spurring industry to embrace technology so as to increase productivity and counter growing external risks from an escalating trade war between the United States and China.

The new project, spearheaded by Malaysian firm DreamEDGE, will be developed with technical assistance from Japan’s Daihatsu Motor Corp, said Darell Leiking, Malaysia’s trade and industry minister.

“It’s privately funded, with no government funding at all,” Darell told a news conference. “We will support anything that is Malaysian long as no government money is expended or used.”

Daihatsu, a subsidiary of Toyota Motor Corp, owns a stake in Perodua, Malaysia’s second homegrown automaker and its best-selling brand.

The domestic car industry has long been a sore point for Malaysians, who saw billions of ringgit in taxpayers’ funds spent to bail out Mahathir’s pet project, Proton, before it was bought by Chinese automaker Zhejiang Geely Holding Group Co Ltd in 2017. [GEELY.UL]

Darell said the new marque, which has yet to be named, would offer affordable vehicles loaded with advanced technology.

The first model, which is likely to be a C-segment sedan powered by either an advanced internal combustion engine or hybrid system, is expected to hit the road by March 2021, said Khairil Adri Adnan, the chief executive of DreamEDGE.

The company is still considering its fundraising options, but expects that it will need “a few hundred million” ringgit to meet its production goal, said Khairil, the firm’s founder.

Domestically produced cars formed a key part of Mahathir’s strategy to turn Southeast Asia’s third-largest economy from an agricultural backwater to an industrialized nation during his first tenure as premier from 1981 to 2003.

Mahathir championed the new car project last year, on his return to power following an unprecedented election win by his opposition coalition in May.

Reporting by Joseph Sipalan; Editing by Clarence Fernandez