page_title: Automotive industry in Malaysia
section_title: Honda Malaysia
hierarchical_section_title: Automotive industry in Malaysia / Automobile production plants in Malaysia / Honda Malaysia
caption_attribution_description: English: 2014 Honda City (GM6 MY14) VTi sedan. Photographed in Preston, Victoria, Australia. Vehicle registration enquiry resultsJurisdictionVictoriaRegistration1BV2SIChassis codeMRHGM6640EP010130Engine codeL15Z11400760Compliance date2014-04Year of manufacture2014
context_page_description: The automotive industry in Malaysia consists of 27 vehicle producers and over 640 component manufacturers. The Malaysian automotive industry is the third largest in Southeast Asia, and the 23rd largest in the world, with an annual production output of over 500,000 vehicles. The automotive industry contributes 4% or RM 40 billion to Malaysia's GDP, and employs a workforce of over 700,000 throughout a nationwide ecosystem.
  The automotive industry in Malaysia traces its origins back to the British colonial era. Ford Malaya became the first automobile assembly plant in Southeast Asia upon its establishment in Singapore in 1926. The automotive industry in post-independence Malaysia was established in 1967 to spur national industrialisation. The government offered initiatives to encourage the local assembly of vehicles and manufacturing of automobile components. In 1983, the government became directly involved in the automotive industry through the establishment of national car company Proton, followed by Perodua in 1993.
context_section_description: Honda Malaysia (HM) currently operates an assembly plant in Pegoh, with a combined maximum annual capacity of 100,000 units. HM assembles Honda passenger cars from imported complete knock down (CKD) kits. Honda Malaysia's shareholders include the Honda Motor Company (51%), DRB-HICOM (34%) and Oriental Holdings (15%).
  Honda Malaysia was established in July 2000 as DRB-Oriental-Honda (DOH), a three-way joint venture between Honda, DRB-HICOM and Oriental. DOH was established to handle assembly, distribution and sales of Honda passenger cars in Malaysia. DRB-Oriental-Honda changed its name to Honda Malaysia (HM) in September 2002. Prior to the advent of Honda Malaysia, Honda operations in Malaysia were handled by Oriental Holdings and their associates, which collectively held the franchise rights for both Honda passenger cars and motorcycles in Malaysia. Honda passenger cars were assembled at the Oriental Assemblers plant in Tampoi, Johor, while Honda motorcycles were built at the Boon Siew Honda Assembly plant in Butterworth, Penang. Both plants had produced Honda models since 1969.
  By the late 1990s, Honda's principles in Japan had sought to become more directly involved in the Malaysian market. The decision was made in anticipation of the impending AFTA implementation in the early 2000s, a period in which many foreign car companies had increased their market presence in Malaysia. Additionally, various complications between Honda and the Oriental Group had also catalysed Honda's decision to establish a direct presence in the Malaysian market.
  Under the DRB-Oriental-Honda joint venture, Oriental Holdings would concentrate on the marketing and sales of Honda vehicles, while Honda would handle assembly operations. The DOH joint venture only encompassed Honda passenger vehicles, while Honda motorcycle operations remained unchanged. Additionally, Honda had decided on the construction of an all-new assembly plant in Pegoh, Malacca, which would take over Honda assembly operations from Oriental Assemblers. Construction of the new plant commenced in August 2001, and was completed in November 2002. The Pegoh plant was built at the cost of RM180 million, with an initial capacity of 20,000 units annually. The earliest second generation Honda CR-V models rolled out of the Pegoh plant in December 2002. In addition to vehicle assembly, the Pegoh plant also manufactures constant velocity joints for both domestic and export markets. The plant produced its 100,000th car, a Honda Civic in November 2007.
  In November 2013, Honda Malaysia established a second vehicle assembly line at the Pegoh plant. The second line was built at the cost of RM382 million, and doubled annual production capacity from 50,000 to 100,000 units annually. Honda Malaysia's second line also became the first outside Japan to feature Honda's Smart Welding Machine technology.
  Honda Malaysia's production, sales and market share grew significantly in the 2010s. In 2015, Honda surpassed arch-rival Toyota as the best-selling foreign-badged car company in Malaysia. The following year, Honda surpassed Proton to place second overall in the Malaysian market. Honda Malaysia currently assembles seven different models, the highest among any Japanese-badged car company in Malaysia. HM also assembles hybrid variants of the Jazz and City respectively.
caption: Honda Malaysia produced its 600,000th unit in March 2017.[135]
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