Malaysian automobile group DRB-Hicom Bhd today said it will invest more than $300 million in Germany's Volkswagen AG to assemble vehicles here for the regional market.
Volkswagen said under the deal with DRB-Hicom Passat cars would be assembled in Malaysia starting at the end of 2011 in line with the European company's plans to grow in southeast Asia.
Volkswagen is expected to use the existing capacities and structures at DRB Hicom's plant in Pekan, in Pahang state to extend its presence in the Malaysian market of the future.
Production will start in the fourth quarter of 2011 with assembly of Passat sedans DRB-Hicom Group Managing Director Mohd Khamil Jamil said in a statement today.
The company will assemble the Polo and Jetta compacts later, it said.
DRB Hicom is also the Malaysian partner of Daimler AG's Mercedes-Benz and Honda Motor Co.
"Developing the market potential of the Asean region is of major significance for Volkswagen Group's long-term growth strategy," Christian Klingler, a member of Volkswagen's board of management who is responsible for sales and marketing, said in a statement.