Despite general optimism on Daihatsu’s participation in the project, analysts caution that it is too early to predict whether DreamEDGE will succeed

by RAHIMI YUNUS/ pic by RAZAK GHAZALI

ANALYSTS and industry players are having mixed reactions following the announcement of DreamEDGE Sdn Bhd as the anchor company to run the new national car project and Daihatsu Motor Co Ltd to provide advanced technological supports.

Incorporated in March 2007, DreamEDGE currently employs 150 staff and most of them are engineers.

Despite general optimism on Daihatsu’s participation in the project, analysts cautioned that it is too early to predict whether DreamEDGE will succeed.

“It is too early to say whether DreamEDGE will succeed or not. I think the partnership with Daihatsu is good,” one analyst, who declined to be named, told The Malaysian Reserve (TMR) when contacted recently.

Another analyst said the track record of Daihatsu with Perusahaan Otomobil Kedua Sdn Bhd (Perodua) provides confidence in the project.

“The government’s role is to ensure DreamEDGE follows the plan for the successful roll-out of the new national car, and with Daihatsu’s support, which has proven successful in delivering Perodua as the No 1 carmaker in terms of volume,” the analyst said.

Malaysia Automotive Robotics and IoT Institute CEO Datuk Madani Sahari said the Japanese automaker’s involvement in the new national car does not entail equity interest. In contrast, Daihatsu owns a 20% stake in Perodua, and 51% in its manufacturing facilities.

Madani said Daihatsu-Perodua partnership would remain at status quo.

One industry player viewed that the new national car must be a game-changer to achieve the desired results.

“Any businesses must make financial sense. And if not, it should be a game-changer like the case of Uber Technologies Inc and Tesla Inc,” the source said.

However, a senior manager of a Japanese carmaker told TMR that favourable policies on local car companies may not necessarily be supportive of the industry.

“It is worrying to see Asean countries promoting the domestic car preferential policies. The automotive market of each Asean country is not that big. Free trade is basic in an economy of scale,” the Japanese source said.

There were also questions on the volume of units that DreamEDGE plans to produce, its vendors, dealership network and after-sales services.

The Cyberjaya-based firm provides engineering services solutions to clients in various industries such as automotive, heavy industries, rail, electronics, energy, defence, precision equipment and tooling design.

The company plans to introduce engineering capability mock-up for the new national car by the end of this month. In mid-September 2019, it will recruit additional employees, followed by the introduction of the first model prototype in March 2020 and the launch of the model a year later.

CEO Khairil Adri Adnan said last week that the first model is likely to be either an advanced internal combustion engine or a hybrid of a C-segment sedan. He said the company is looking at contract manufacturing to produce the car for a mass market.

On the funding front, he said the company is in the middle of discussion to gain a few hundred million and it will select the best fundraising scheme for the project. This is in line with the government’s term that the new national car is to be privately funded.

International Trade and Industry (MITI) Minister Datuk Darell Leiking also stressed that the new national car project is a privately funded course, although DreamEDGE can apply for any tax incentives.

Carmakers that manufacture their vehicles in the country are given various tax breaks and research and development grants to spur localisation in the industry.