KL, Jakarta ink MoU on ASEAN Car

Indonesia and Malaysia have signed a Memorandum of Understanding (MoU) for a joint venture to produce the first fully local-made ASEAN vehicle.

The MoU, signed in Jakarta on Friday, marks the start of cooperation between the two countries to improve their automotive manufacturing workforce and supply chains to fully produce components in the region and establish a new brand.

Malaysian Minister of International Trade and Industry Darrell Leiking said the agreement followed Prime Minister Mahathir Mohamad’s meeting with President Joko Widodo in June.

“This shows that Malaysia and Indonesia… should stay together in the economic and social development of the Asean region,” Mr Leiking said at the signing.

Under the MoU, the joint venture will be run by the Malaysian Automotive Institute (MAI) and the Indonesian Automotive Institute (IOI), both government bodies.

MAI chief executive Mohamad Madani Sahari said Indonesia and Malaysia together were already capable of manufacturing vehicles with 90 per cent of their components made locally.

The two countries – the world’s largest palm oil producers – had also looked into the possibility of manufacturing cars that run on biodiesel.

After the event, Mr. Mohamad said: “We will have more cooperation on research to advance our (capabilities) in creating electrical, hybrid vehicles.” However, he declined to set a target date for when a prototype vehicle might be completed.