Investment for 3rd national car could hit RM1b

DreamEDGE is envisioned to sell at least 3,000 cars a month in the 1st year of sales, says analyst

by RAHIMI YUNUS / pic by RAZAK GHAZALI

DREAMEDGE Sdn Bhd’s investment to develop and manufacture the third national car, which is expected to go into full production by the first half of 2022 (1H22), could reach as high RM1 billion.

An analysis released by Affin Hwang Investment Bank Bhd stated that DreamEDGE — the “anchor company” to develop the new national car project (NNCP) with a technology support partner Daihatsu Motor Co Ltd — has set aside a minimum of RM600 million as the initial start-up cost.

“Elsewhere, the estimated initial start-up cost (based on Daihatsu’s platform and power train) could require at least RM600 million, but dealership network establishment and production-related preparation costs could see cost overruns of up to RM1 billion,” the report said, which was published yesterday following a recent meeting between Affin Hwang and DreamEDGE management, as confirmed by the author of the report, analyst Brian Yeoh.

Yeoh said DreamEDGE’s management is currently in active discussions with several parties on funding, which the bulk of it will be privately funded.

He said DreamEDGE is also envisioned to sell at least 3,000 cars a month in the first year of sales, which would translate into at least 36,000 cars per year.

In comparison, Proton Holdings Bhd and Perusahaan Otomobil Kedua Sdn Bhd sold more than 79,000 and 201,000 passenger cars in the first ten months of this year respectively, according to the Malaysian Automotive Association data.

Yeoh said DreamEDGE’s first model is most likely a B+ segment sedan car that is powered either by an internal combustion engine or a hybrid power train.

“We believe that DreamEDGE’s proposed timeline for the NNCP is tight, with plans to launch a model in production by 1H22. Nonetheless, the management reaffirmed that a working NNCP prototype is on track for release by mid-2020”.

“On a more positive note, we are comforted to know that DreamEDGE has received the blessing from Daihatsu’s participation,” he said in the research report.

The car is also expected to feature the latest technology as a smart vehicle with connectivity, smart vehicle system and advanced driver assistance system.

The analyst said Affin Hwang gathered that the NNCP production will be through a contract manufacturing.

Yeoh said it is learned that the design concept and development of the car will be engineered by DreamEDGE, while technology partner, Daihatsu, is set to assist in the development of the power train and car platform.

“At our meeting, DreamEDGE reiterated that the NNCP would not be another rebadged Daihatsu,” the report said.

The third national car project, which was mooted by Prime Minister Tun Dr Mahathir Mohamad (picture) during his visit to Japan last year, is envisioned to revitalise the country’s engineering prowess.

The idea, however, received backlash from various parties who questioned the need for another national car, given the size of the local automotive market.

Incorporated in March 2007, DreamEDGE offers engineering services and innovative solutions in automotive, rail, aeronautics and manufacturing.

The Cyberjaya-based company is owned by CEO and founder Datuk Khairil Adri Adnan with an 82% stake; followed by VentureTECH Sdn Bhd (10%), which is a wholly-owned subsidiary of the Malaysian Industry-Government Group for High Technology; and COO Azhan Abdul Aziz (8%).