In a filing to the Hong Kong Stock Exchange on May 24, Tan Chong International Limited (TCIL) and Subaru Corporation has announced plans to phase out its local assembly (CKD) operations for Subaru vehicles in Southeast Asia. Starting in 2025, all Subaru vehicles in Malaysia, Thailand, Vietnam, and Cambodia will be fully imported (CBU) from Japan.
The cessation of CKD operations in ASEAN is described as a “forward-looking, future-proof approach to adapt to emerging market dynamics”, as the companies believe that the existing CKD business model is “no longer sustainable in the long term”.
TCIL is the parent company to Motor Image Group, the exclusive regional distributor for Subaru vehicles in the majority of Asian markets. In 2017, the company formed the Tan Chong Subaru Automotive Thailand (TCSAT) joint venture company with Subaru Corporation, for the local assembly of Subaru vehicles in Thailand.
The plant is the first dedicated Subaru manufacturing plant outside of Japan in Asia and the third plant to fully produce Subaru vehicles worldwide. Operations officially begun in 2018, and it currently manufactures the fifth-generation Subaru Forester for the Thailand, Malaysia, Vietnam and Cambodia markets.
In Malaysia, Subaru begun CKD operations of its vehicles at the Tan Chong Motor Assemblies plant in 2012. Currently, only the Subaru XV is locally assembled at the plant in Segambut, with the model also being exported to other markets in the region.
Despite the discontinuation of the CKD project, the companies continue to emphasise their commitment to the Southeast Asian market.
“The Joint Venture remains strong, as TCIL and Subaru Corporation continue to remain agile and explore additional viable business avenues together in Thailand, Vietnam, Malaysia, and Cambodia. TCIL and Subaru Corporation are confident that this strategic decision will position subaru for continued success in these dynamic markets.” the statement read.
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