The new national car project is expected to be built via contract manufacturing, which would likely utilise assembly plants with excess capacity. — Bernama photo
KUCHING: The new national car project is expected to benefit from incentives possibly included in the upcoming National Automotive Policy 2019 (NAP 2019).
Following a meeting with the management of DreamEDGE, the Cyberjaya-based company leading the new national car project, the research team at Affin Hwang Investment Bank Bhd (AffinHwang Capital) noted that the third national car project would likely be a B+ segment sedan car (neither a C-segment sedan nor a flying car), powered either by an internal combustion engine or a hybrid powertrain.
It also pointed out that the design concept and development of the car will be engineered by DreamEdge, while technology partner, Daihatsu is set to assist in the development of the powertrain and car platform.
“The new national car project’s pricing is expected to be competitive, in our view, given that the high local content (circa 90 per cent) will benefit from incentives likely included in the upcoming National Automotive Policy 2019,” AffinHwang Capital highlighted.
Featuring the latest technology (smart vehicle concept – car connectivity, smart vehicle system, Advanced Driver Assist System, etc), the research team said DreamEdge targets to sell at least 3,000 units per month of the car during its first year of sale.
“In the first 10 months of 2019 (10M19), Proton and Perodua sold about 52,600 and 163,800 passenger cars, respectively,” it added.
As for the proposed timeline of launching the new national car project by the first half of 2022 (1H22), AffinHwang Capital believed that the timeline is narrow.
“Nonetheless, management reaffirmed that a working NNCP prototype is on track for release by mid-2020,” it added.
On a more positive note, DreamEdge has received the blessing from Daihatsu’s participation; it is also currently in active discussions with several parties on funding (the bulk of which will be privately-funded).
“Elsewhere, the estimated initial start-up cost (based on Daihatsu’s platform & powertrain) could require at least RM600 million, but dealership network establishment and production related preparation costs could see cost overruns of up to RM1 billion,” it said.
In terms of production, it noted that the new national car project is expected to be built via contract manufacturing, which would likely utilise assembly plants with excess capacity.
“At our meeting, DreamEDGE reiterated that the NNCP would not be another re-badged Daihatsu,” it added.
All in, AffinHwang Capital remained ‘neutral’ on the overall auto sector as it expected car sales to moderate on poorer consumer sentiment amid unfavourable economic conditions.