BYD Malaysia has appointed Inokom, a subsidiary of Sime Motors, as its local assembly partner, with production planned at Inokom's plant in Kulim, Kedah.

The decision follows the shelving of BYD Malaysia's planned facility in Tanjong Malim, Perak, a month earlier. The facility was part of the company's local assembly strategy announced more than two years ago. The partnership was formalised through a memorandum of understanding (MoU) signed at BYD's global headquarters in Shenzhen, China.

BYD vice-president and general manager of BYD Asia Pacific Auto's sales division, Liu Xueliang, and Sime Motors managing director of Southeast Asia, Jeffrey Gan, signed the agreement, witnessed by representatives from both companies.

The announcement follows indications of the partnership during Liu's visit to Kulim in May. BYD Malaysia said Inokom was selected after an assessment of the local market and available manufacturing capabilities. Its existing assembly operations, workforce, infrastructure and local supply chain will support BYD's local production plans.

Using these facilities instead of developing a dedicated plant could reduce the time and capital required to begin production while providing access to established logistics networks, suppliers and workers. Inokom's experience assembling vehicles for several international brands also provides familiarity with different production requirements and manufacturing standards.

BYD has yet to disclose the investment amount, production capacity, assembly timeline or models to be produced in Kulim. The first vehicles to be assembled have also not been identified, with these details subject to further discussion and approval.

BYD currently offers seven models in Malaysia, while its luxury brand, Denza, has two models in its local line-up: the D9 and B8. Sime Motors, Inokom's parent company, is also BYD's authorised distributor in Malaysia.

BYD Malaysia managing director Jacob Ma said local assembly formed part of the company's long-term plans for Malaysia. He added that the arrangement with Sime Motors and Inokom would enable BYD to use existing manufacturing facilities and apply its expertise in new energy vehicles and battery technologies to the Malaysian market. Ma also said the company would continue exploring opportunities to increase its investment through collaboration with local industry partners as it expands its market presence.

Sime Darby group chief executive officer Datuk Jeffri Salim Davidson said BYD's decision reflected Malaysia's automotive manufacturing capabilities. He noted that Inokom's vehicle assembly experience, workforce and local supply chain would support the partnership. He added that the arrangement could create opportunities for local businesses and support the development of capabilities within Malaysia's automotive industry.

The partnership will combine Inokom's manufacturing infrastructure and operational expertise with BYD's vehicle technology, battery expertise and production experience. It will allow BYD to use Malaysia's existing automotive assembly infrastructure for its production plans.

Local assembly could enable BYD to adjust production in response to market demand as Malaysia's electric vehicle sector develops. Government incentives and policy measures are intended to encourage EV adoption, while more brands are expanding their vehicle offerings in the market.

Depending on the programme's scale, it could generate demand for local suppliers and service providers in areas such as vehicle components, logistics, technical support and workforce training. The extent of these opportunities will depend on the assembly programme's production capacity, models and scope, which have not yet been announced.