Naza gears up for global markets

From humble beginnings as a small Cheras car dealer in 1976, company founder Tan Sri S.M. Nasimuddin and his brother built up a sophisticated Malaysian conglomerate

IF there is one Malaysian approved permit (AP) holder which has made its mark by doing much more than merely importing and selling cars for profit, it’s got to be the Naza Group.

Whilst enjoying the privilege (and controversy) of being a leading AP holder, the company believes it has over the years steadily added value to the local and its own motor trading business.

The firm, with a 6 per cent share of the Malaysian car market, has ventured way beyond selling cars.

The Group is licensed by Kia Motors Corp of South Korea to produce and assemble Kia-based vehicles under the Naza and Kia brands.

With the licence and initial technical support from Kia, it has forayed into the local assembly of several Kia car models with completely knocked down (CKD) parts from South Korea, while gradually increasing local (parts) content.

And this year it has plans to crown its achievements by becoming a notable Malaysian exporter of some of its locally assembled vehicles to the world market.

One of the keys to realising the lofty ambitions of the Group’s founder and chairman, Tan Sri S.M. Nasimuddin S.M. Ali, is the RM500 million automotive complex set over 150 acres of land in deeply rural Gurun, Kedah.

This facility, surrounded by a sea of lush, dark green-leaved oil palm trees, is where the bulk of the Group’s car assembly is done.

It takes about 18 hours to assemble one car and the plant is staffed by 1,100 workers.

The three-year-old plant, surrounded for ease of logistics by a cluster of component vendors and suppliers, aims to roll out 50,000 units of Naza Spectra, Sorento, Citra and Ria this year compared with 21,500 last year.

Another 3,000 staff are employed by vendors and suppliers sited within the complex.

This plant is also where two of Naza’s own pioneer new car models, codenamed the NX01 and NX02, have been designed, modelled and tested. (see box for details).

Three more new Naza models are now being negotiated for development at the Gurun complex with foreign partners.

One of them is on the verge of taking off, Naza officials say.

In the push to lift its game and accommodate new models, the Group is developing a new 255-acre plant at an estimated total cost of RM1.2 billion at Bertam in Penang.

“You cannot stop investing if you are in the car industry,” Naza Automotive Manufacturing Sdn Bhd (NAM) senior general manager, Nor Hadi bin Daud, said during a visit to the Gurun plant.

“The aim is to be ready by late 2007 or early 2008 for the first rollout of cars from the new assembly plant.”

While the Gurun plant was built with internally generated funds, the privately owned Group might have to go to the market to raise funds for the new Bertam plant and development of new models, industry sources say.

This is why a listing of one or two units — namely Naza Kia Sdn Bhd and Naza Automotive Manufacturing Sdn Bhd — may take place by year-end or early next year.

The new Naza-Kia training academy in the Gurun complex, the most sophisticated of its kind in Malaysia, is set to churn out up to 2,000 trainees for the company and its partners in future.

Naza’s partner Kia has nominated the academy to be its overseas training centre in the Asia Pacific.

Besides hard skills (technical), the academy offers soft skills training in marketing, sales, branding and management.

“We set this academy up to ensure that we passed on automotive knowledge to the next generation, something that we (his brother Nasimuddin and he) learnt on our own,” said NAM group executive director, Datuk S.M Shalahuddin S.M. Amin.

A top priority for the Naza Group is that it must become a Malaysian version of the successful South Korean car firm Kia.

“We want to emulate Kia, be their export partner and a truly integrated Malaysian automotive player in the world market,” said Samson George, general manager at Naza Kia.

“For example, the assembly of Kia’s Pregio model will soon be discontinued in South Korea and we aim to take over the export of that model overseas from our Malaysian assembly plant,” he added. The South Korean-modelled 2.7 litre Pregio is currently under contract assembly at DRB-HICOM’s plant in Pekan, Pahang where 5,000 units will roll out this year.

Right-hand drive models are expected to be exported worldwide from next month, while left-hand drives could be exported in six months time.

So from humble beginnings as a small car dealer called Naza Motor Trading Sdn Bhd in 1976 from Cheras in Kuala Lumpur, founder Nasimuddin and his brother Shalahuddin have really built up a sophisticated local conglomerate now.