Go Automobile has a strong technology partner: Mustapa

KUALA LUMPUR: International Trade and Industry Minister Datuk Seri Mustapa Mohamed has defended the issuance of the first energy efficient vehicle (EEV) manufacturing licence to a little- known company, Go Automobile Manufacturing Sdn Bhd, saying that it was given on the strength of its technology partner China-based Great Wall Motor Co Ltd (GWM).
"The local company is not well known, yes, but they (CEO Ahmad Azam Sulaiman and partners) were the people who pioneered Perusahaan Otomobil Kedua Sdn Bhd (Perodua). They also have a small assembling business in Gurun, Kedah, and they are now building and expanding their capability. But what's important is that they have got a technology partner (GWM)," he said.
Mustapa added that from the ministry's perspective, there is no concern about issuing the first EEV manufacturing licence under National Automotive Policy (NAP) 2014 to the local company.
"We got no worries over there. They (GAM) will be 100% supported by the Chinese company," he said.
Mustapa explained that GAM is dealing and collaborating with GWM, which is the biggest domestic auto player in China.
"They (GWM) are now producing 750, 000 units of vehicle, this is the number eight (auto) player in the Chinese market," he added.
Mustapa also alluded to a possible change in shareholding in the future.
"We have been informed that there might be some changes in shareholding (of GAM)," Mustapa told a press conference after chairing the Malaysia Services Development Council (MSDC) meeting here yesterday, without elaborating further.
He said the current business model is that the company (GAM) is 100%-owned by this group of people (Ahmad Azam and his partners), and the Chinese party (GWM) will bring in the expertise and their components. Mustapa personally handed over the first EEV manufacturing licence to GAM at a ceremony on Wednesday.
GAM said then it plans to raise RM2 billion to finance a manufacturing plant for fuel-efficient sport utility vehicles (SUVs) for GWM, China's largest SUV producer.
Ahmad Azam had said the Hong Kong and Shanghai-listed GWM may take a stake in the form of joint-venture with GAM at a later stage.
Asked if the GAM-GWM tie-up is the sort it is eyeing in its quest to turn Malaysia into a global green hub, Mustapa said yes.
GAM is currently owned by its CEO Ahmad Azam, Muhadzir Mohd Isa, as well as Wan Ahmad Wan Omar and Farok Maasom (via W & R Resources Sdn Bhd). Ahmad Azam, Wan Ahmad and Farok are also the directors of GAM.
GWM will be using GAM's production facility, which will be built in Gurun, with the support of tier-zero (T0) automotive suppliers, said Mustapa.
He added that the six local vendors, which were appointed as GAM's T0 partners on Wednesday, are the best automotive suppliers in the country.
Commenting on the upcoming EEV manufacturing licences to be issued, Mustapa said Miti will have to "do due diligence and be very careful", by considering two major factors in deciding the issuance of EEV licence.
"Firstly, you have to meet the EEV standards set by Malaysia Automotive Institute (MAI). Secondly, (we want to look at) the percentage of export, because we cannot flood the (local) market," he said.
For instance, he said, the GAM- GWM partnership plans to export 60% of its output to other Asean countries.