Chery Mulls CKD Operations Expansion to Accommodate New Models

Chery Malaysia is keen to expand its CKD operations to accommodate new models coming next year

Chery Malaysia has a pretty ambitious plan in store for 2024, as the Chinese marque plans to expand its current lineup to not only include its first EV model, but also several new sub-brands. In order to accommodate this lineup expansion, Chery Malaysia is also keen to further expand its current local assembly (CKD) operations.

Chery Malaysia president & Chery International VP Shawn Xu (left) has expressed the marque's interests in further expanding its CKD operations here in Malaysia

Speaking during an official interview at the Chery International User Summit (CIUS) 2023 in Wuhu, China earlier this month, Chery Malaysia president and Chery International VP Shawn Xu expressed the marque’s interest of expanding its CKD operations to cover both the new Omoda 5 EV and other future models under the Jaecoo sub-brand.

Currently, Chery Malaysia’s CKD operations at Sime Darby’s Inokom plant in Kulim, Kedah, involves two of the marque’s current models, the Chery Omoda 5 and Tiggo 8 Pro, with the former accounting for more than 70% of the marque’s current sales. With the current production rate of only six units per hour, the waiting period for both models now stretches over three months – thus prompting Chery to expand this operation.

As for now, Chery Malaysia is still studying different proposals and approaches to ramp up its CKD operations, aiming to at least double its current maximum production capacity of 15,000 units annually. According to Xu, this target should be enough to not only shorten the delivery time for both the current Omoda 5 and Tiggo 8 Pro models, but also to accommodate future models and sub-brands.

Xu added that the possibility of Chery Malaysia setting up its own production facility is pretty likely

More importantly, Xu stated that Chery Malaysia might also consider setting up their own dedicated production facility, with Chery International ready to bring more investments into Malaysia. This new investment might also cover for a new R&D centre and other supplementary facilities for the main CKD operations. However, Chery Malaysia has yet to finalise any plans regarding this investment-heavy expansion, though Xu hinted that such an expansion is pretty likely to happen.

As we mentioned earlier, Chery Malaysia’s current CKD operations feature a maximum production capacity of 15,000 units per year, with about 30% of localised parts and sources used. Should this expansion plan come into fruition, Chery Malaysia is looking to not only double its production capacity, but also increase its localisation percentage to 40%.

Both the Jaecoo 7 & 8 SUVs will be locally-assembled, coming into our market in Q2 2024

Chery Malaysia is poised to introduce at least three new models next year, with all of them set to be locally-assembled here in Malaysia. This includes the new Chery Omoda 5 EV – marque’s first EV model for the Malaysian market – as well as two models under the new Jaecoo sub-brand – the Jaecoo 7 and 8 SUVs.