Perodua May Buy Tan Chong’s Serendah Factory to Boost Production
Perodua May Buy Tan Chong’s Serendah Factory to Boost Production
Perodua is reportedly considering buying Tan Chong Motor Assemblies’ Serendah factory as it looks to increase production capacity, especially for its upcoming electric vehicle (EV). The Serendah plant is located just 3km from Perodua’s Sungai Choh factory and is said to be valued at around RM500 million. Last month, Perodua and Tan Chong signed a letter of intent (LOI) that allows Perodua to use Tan Chong’s facilities. Under this agreement, Tan Chong will provide painting services and assembly lines for the production of the Perodua QV-E, Perodua’s first EV. Currently, Perodua is leasing capacity to produce up to 30,000 vehicles per year at the Serendah plant, which has a total capacity of about 40,000 units annually. This leasing deal is expected to generate around RM80 million in revenue for Tan Chong. This move could be a win-win situation. Perodua is already operating beyond its maximum capacity of 320,000 units per year, while Tan Chong’s factories are under-utilised due to weaker vehicle demand. For Perodua, buying the Serendah factory would add much-needed production space and support its future EV expansion. For Tan Chong, renting out or selling the plant could help reduce losses and improve cash flow.
Singapore