Cambodia wants its own car industry

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Made in CambodiaCambodia is planning to manufacture a domestic car brand after state-owned ACICA Automotive signed a $2 billion joint venture investment with UK-based BIW Automotive.

The plan is to to build a factory in Preah Sihanouk province for a Cambodian-made low-cost car within the next three years at a capacity of around 300,000 units per year for sale domestically, within ASEAN and globally.

The project entails a huge capital investment, with $450 million spent on building a new power station to supply the factory. An additional $1 billion is planned to be spent on construction of a new township, infrastructure and water supply facilities, while the remaining amount will be used for the car project, according to ACICA’s Group Chairman Al Rumny.

BIW says it has already designed a car that could sell for about $3,200. However, the Cambodian car would cost around $7,000. The company said such a car would bridge the gap between the maximum cost for a motorcycle and entry-level small family cars particularly in the ASEAN market.

The car is meant to be entirely built in Cambodia, meaning that all parts, the engine and the body will be of domestic origin and no parts will be bought from abroad, Rumny said.

However, observers say that Cambodia might have a hard time to economically produce and sell such cars within strong competition from Japanese, South Korean and Chinese brands which are all active in the small car market. They also reminded of the fact that Malaysia, a country with a far higher investment potential, failed to build up its own domestic car industry with Proton and is only successful in redesigning foreign brands such as Daihatsu. Likewise, Indonesia has been trying to build an own car since many years to no avail.

Presently, Cambodia’s demand for new cars is just between 2,500 to 3,000 units per year. Thus, 99 per cent of the planned capacity would have to be sold outside Cambodia.

 

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Reading Time: 2 minutes

Cambodia is planning to manufacture a domestic car brand after state-owned ACICA Automotive signed a $2 billion joint venture investment with UK-based BIW Automotive.

Reading Time: 2 minutes

Made in CambodiaCambodia is planning to manufacture a domestic car brand after state-owned ACICA Automotive signed a $2 billion joint venture investment with UK-based BIW Automotive.

The plan is to to build a factory in Preah Sihanouk province for a Cambodian-made low-cost car within the next three years at a capacity of around 300,000 units per year for sale domestically, within ASEAN and globally.

The project entails a huge capital investment, with $450 million spent on building a new power station to supply the factory. An additional $1 billion is planned to be spent on construction of a new township, infrastructure and water supply facilities, while the remaining amount will be used for the car project, according to ACICA’s Group Chairman Al Rumny.

BIW says it has already designed a car that could sell for about $3,200. However, the Cambodian car would cost around $7,000. The company said such a car would bridge the gap between the maximum cost for a motorcycle and entry-level small family cars particularly in the ASEAN market.

The car is meant to be entirely built in Cambodia, meaning that all parts, the engine and the body will be of domestic origin and no parts will be bought from abroad, Rumny said.

However, observers say that Cambodia might have a hard time to economically produce and sell such cars within strong competition from Japanese, South Korean and Chinese brands which are all active in the small car market. They also reminded of the fact that Malaysia, a country with a far higher investment potential, failed to build up its own domestic car industry with Proton and is only successful in redesigning foreign brands such as Daihatsu. Likewise, Indonesia has been trying to build an own car since many years to no avail.

Presently, Cambodia’s demand for new cars is just between 2,500 to 3,000 units per year. Thus, 99 per cent of the planned capacity would have to be sold outside Cambodia.

 

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