PETALING JAYA: Sime Darby Bhd will be the key beneficiary of Chinese carmaker BYD’s tie up with a local car assembly partner for its completely knocked-down (CKD) vehicle operations in Malaysia, a research house said.
This follows BYD’s appointment of Sime Darby’s 54%-owned subsidiary Inokom Corp Sdn Bhd to assemble BYD electric vehicles (EVs) at its plant in Kulim, Kedah. The memorandum of understanding was signed yesterday at BYD’s headquarters in Shenzhen, China.
“While still pending further clarity on production volumes secured by BYD with Inokom, we view the pivot to contract assembly as positive for Sime Darby,” CGS International said in a note today.
The research house noted the higher production volumes could also improve economies of scale at Inokom, which can produce up to 80,000 units per year, with a utilisation rate of 80%. Sime Darby is also the official distributor of BYD vehicles in Malaysia since 2022.
Inokom is partly owned by South Korea’s Hyundai Motor Company and Bermaz Auto Bhd, which assembles Mazda vehicles.
BYD’s shift to contract assembly comes after scrapping its previous plan, announced in August 2025, for an assembly plant in Tanjung Malim, Perak, to produce up to 50,000 units a year.
However, the proposed facility was subsequently subjected to a requirement by the ministry of investment, trade and industry (Miti) for up to 80% of cars produced there to be exported. The remaining 20% would also need to be priced above RM200,000 per unit.
After news broke in March that BYD was having second thoughts about the Tanjung Malim plant, Miti came out to defend its conditions, calling them “non-discriminatory” and saying they apply to all high-volume automotive projects.
Opting for contract assemby via Inokom means BYD is effectively freed from the limits imposed as well as it benefits from tax exemption for locally-assembled EVs until 2027.
That should support the sustainability and competitiveness of Sime Darby's BYD distribution business in Malaysia, CGS noted.
It also said there is potential for an extension of the EV tax exemption given the government's focus on promoting local assembly.
BYD currently offers seven models in Malaysia though details of which models will be assembled locally have yet to be announced.
It has sold more than 35,000 vehicles since entering the Malaysian market, including over 7,500 units in the first half of this year.