EP Manufacturing targets 6,000 units by year-end at Melaka plant

EP Manufacturing targets 6,000 units by year-end at Melaka plant

07 May 2024

AUTO parts maker EP Manufacturing Bhd targets to commence the first phase of its factory in HICOM Pegoh Industrial Park in Melaka in the third quarter of 2024 (3Q24). 

EP Manufacturing group CEO Ahmad Razlan Mohamed said the company expected to achieve a production of 6,000 units by the year-end. 

“We have completed an agreement with Great Wall Motor Co Ltd (GWM) for the manufacturing and assembly of vehicle models,” he told The Malaysian Reserve (TMR) in a recent interview. 

A Tier-1 automotive supplier, EP Manufacturing operates five plants and factories across Malay- sia, supplying modular assemblies, safety and critical components to carmakers such as Proton Holdings Bhd and Perusahaan Otomobil Kedua Sendirian Bhd (Perodua). 

In January, EP Manufacturing announced that its subsidiary, PEPS-JV (Melaka) Sdn Bhd (PJVM), will serve as the contract vehicle assembler for the Malaysian unit of China’s GWM for the next eight years. 

EP Manufacturing’s focus will be on assembling and producing GWM’s Haval H6 and Haval Jolion SUV models. 

The move into car assembly aligns with EP Manufacturing’s commitment to vertical integration, presenting an opportunity to expand revenue streams and diversify its business portfolio. 

It then said the assembly activities will take place at the Melaka facility, aiming for an annual output of 20,000 units by 2028. 

Additionally, the facility will cater to the production of China-based Beijing Automotive Group Co Ltd (BAIC) vehicles. 

In April, EP Manufacturing announced its partnership with BAIC to assemble and manufacture BAIC’s authorised model vehicles in Malaysia. 

It said its wholly-owned subsidiary PJVM had finalised an agreement with BAIC, a subsidiary of Beijing Automotive Group Co Ltd, one of China’s largest carmakers and a Fortune Global 500 company. 

Under the terms of the 10-year agreement, PJVM will be responsible for assembling and manufacturing the vehicles in Malaysia, with a targeted capacity of at least 5,000 vehicles per year by Sept 1, ramping up to 10,000 vehicles annually by March 1 of the following year. 

PJVM will also handle the procurement of all necessary devices, equipment, permits or approvals for vehicle assembly and manufacturing. 

In return, BAIC will authorise PJVM for assembly and manufacturing, provide technical support and training, and oversee the assembly process. 

The agreement superseded a memorandum of understanding signed in August 2023, focusing on developing BAIC’s BJ40P and X55II SUVs and right-hand drive electric vehicles (EVs) for Malaysia and other South-East Asian markets. 

EP Manufacturing said it viewed the collaboration as an opportunity to vertically integrate its operations and tap into the growing automotive market, thereby enhancing its income streams and financial stability. 

“The strategic collaborations with original equipment manufacturers from China signify our commitment to charting a course towards better profitability for our stakeholders,” said EP manufacturing executive chairman Hamidon Abdullah in a statement. 

EP Manufacturing had previously announced an investment of over RM100 million for the construction of the plant in Melaka. The facility was expected to create around 1,000 new jobs upon full operation and initially produce up to 30,000 vehicles annually. 

Source: The Malaysian Reserve