Malaysia's automotive manufacturing sector continues to expand its regional footprint, with Proton increasing powertrain production capabilities at its Tanjung Malim engine assembly plant, while contract vehicle assembler Inokom prepares additional investments to expand its manufacturing operations in ASEAN.

Proton expands powertrain production capabilities

Proton has announced that its engine assembly plant in Tanjung Malim, which opened in 2022, has expanded to produce dedicated hybrid engines (DHE), dedicated hybrid transmissions (DHT) for hybrid and plug-in hybrid vehicles, and electric drive units (EDU) for electric vehicles (EVs).

The facility, which previously produced engines exclusively for Proton's petrol-powered vehicles, was recently retooled to manufacture the company's latest 1.5-litre i-GT four-cylinder engines, replacing the GEP3 three-cylinder unit.

According to Proton, the components produced at the plant will support both current and future Proton models, as well as selected Geely programmes in overseas markets. The company stated that it is currently the only original equipment manufacturer (OEM) in Malaysia assembling internal combustion engine, hybrid, plug-in hybrid and electric vehicle powertrains at the same facility.

"The engine assembly plant is a strategic investment that reflects Proton's long-term commitment to developing Malaysia's automotive industry. The fact that we are assembling products for internal combustion, hybrid, plug-in hybrid and electric vehicles demonstrates our readiness to support the industry's evolving needs while ensuring Malaysia remains competitive in a rapidly changing mobility landscape," said deputy chief executive officer Abdul Rashid Musa.

Since its launch, Proton has invested more than MYR 121 million (US$ 29.2 million) to expand production capabilities at the facility. The plant currently has an annual design capacity of 240,000 engines. Proton plans to increase capacity to 400,000 units by 2028 to support future vehicle programmes and export demand.

Export support for Geely programmes

Proton also confirmed that the Tanjung Malim facility now supplies components for Geely vehicles sold in overseas markets, including Vietnam, South Africa and Mexico. While Proton did not disclose specific programme details, industry information indicates that the engines are likely being supplied for the Geely Coolray, a model known in Malaysia as the Proton X50. The vehicle has recently been updated in all three markets with Geely's latest 1.5-litre turbocharged four-cylinder engine producing 181 PS and 290 Nm, marketed by Proton under the Intelligent Green Technology (i-GT) branding.

Vietnam is understood to receive fully assembled Coolray vehicles from Proton's Tanjung Malim operations under an arrangement that has been in place since late 2024, while Geely's manufacturing facility in the country is expected to begin operations later this year. Given that Vietnam and Mexico are left-hand-drive markets, Proton is also believed to export vehicles directly to those markets rather than supplying engines to China for installation in Chinese-built vehicles.

In South Africa, Geely recently introduced the Coolray as its first non-electrified model in the market. The vehicle replaces the Proton X50, which had previously been sold there before Proton's local distributorship ended earlier this year. Having previously assembled vehicles for the South African market, Proton is expected to continue supplying vehicles under the Geely brand.

Proton stated that the growing export activity reflects Malaysia's participation in the global automotive value chain and demonstrates the ability of local manufacturing operations to meet international quality requirements.

The localisation effort also benefits Malaysian suppliers. Proton has established a supplier network comprising 16 vendors, eight of which are local companies. According to the company, the initiative supports the development of Malaysian automotive suppliers.

Future vehicle applications

With DHE, DHT and EDU production now underway, the first recipients of the new powertrain components are expected to be Proton's locally assembled eMas 5 and eMas 7 electric vehicles, while production of the eMas 7 plug-in hybrid variant is expected to commence in the near future.

The expanded powertrain capability also has implications for Proton's upcoming AMA02 project, the second vehicle to be developed on the company's Advanced Modular Architecture (AMA) platform after the Saga.

The model, which is expected to be launched by the end of the year as a compact A-segment SUV positioned against the Perodua Ativa and potentially named the Saga Cross, is expected to utilise a version of the naturally aspirated engine and single-speed DHT currently used in the eMas 7 plug-in hybrid system, albeit without the large battery pack. The hybrid system, marketed in China as the i-HEV in the Geely Preface sedan and displayed at the recent Kuala Lumpur International Mobility Show (KLIMS) under the FutureMotion HEV branding, is expected to feature an electric motor producing 163 PS (120 kW) in the AMA02.

Inokom expands manufacturing capabilities

Separately, Inokom Corporation has announced plans to launch a new vehicle painting facility at its 200-acre manufacturing site in Kulim, Kedah, as part of efforts to expand its automotive assembly operations in the ASEAN region.

The contract vehicle assembler has been operating for nearly three decades, with production commencing in 1997. The company is currently majority-owned by Sime Motors, which holds a 51% stake. Other shareholders include Sime Darby Hyundai (5%), Hyundai Motor Company of South Korea (15%) and Bermaz Auto (29%).

Inokom currently assembles vehicles for seven global automotive brands: BMW, MINI, Porsche, Mazda, Hyundai, Chery and Kia. The company produces vehicles for both the domestic market and export destinations.

Although Kia remains part of the portfolio, the brand recently announced that its local completely knocked down (CKD) assembly operations will be transferred to Stellantis' Gurun plant in Kedah. Operating under a plant-within-a-plant concept, Inokom maintains dedicated assembly lines designed to meet the technical and quality requirements of each automotive brand. The Kulim facility includes integrated body shops, paint shops, assembly operations and centralised warehouse facilities.

The operation is supported by a workforce of more than 2,700 employees, all of whom are Malaysian. In addition to vehicle assembly activities, Inokom works with 370 local vendors as part of its supply chain network.

Growth driven by global automotive partnerships

"Inokom is a testament to what Malaysian industry is capable of achieving. It continues to uphold the trust of world-leading automotive marques, and this speaks volumes about the depth of capability we have built here in Malaysia. This aligns closely with high-value, homegrown industrial strength that the national GEAR-uP agenda strives to nurture and sustain, particularly in advancing high-value manufacturing built on Malaysian expertise and capabilities that are competitive on the global stage," said Sime Group chief executive officer Datuk Jeffri Salim Davidson.

Inokom's collaboration with Hyundai dates back to 1993. The company expanded into commercial and passenger vehicle assembly in 2000 with the Inokom Lorimas, based on the Hyundai Porter, followed by the Inokom Atos, based on the Hyundai Atos, in 2002.

The first locally assembled Mazda3 entered production in 2011. Since then, the site has expanded production to include numerous BMW and MINI models. Inokom is also home to BMW Group's third-largest engine assembly plant globally. The facility was launched in 2018 as part of a partnership between BMW and Sime that began in 2003 and led to BMW establishing manufacturing operations in Kulim in 2009.

In 2026, the BMW i5 became the first fully electric BMW model to be assembled in the Asia-Pacific region. In 2021, Porsche selected Inokom as its first assembly facility outside Europe. Local assembly operations were expanded in 2024 to include exports to Thailand.

Chery became the latest automotive brand to join Inokom's portfolio in 2023. In 2024, the Omoda E5 became the first electric vehicle to be assembled at the Kulim facility.

"The automotive landscape is changing rapidly, with new technologies, emerging markets and evolving expectations. We are committed to ensuring that Inokom remains prepared for these developments through continued investment in people, standards and manufacturing capabilities. As an industrial anchor in the NCER (Northern Corridor Economic Region), Inokom also continues to create employment and business opportunities through skills development, support for local businesses and contributions to the broader economy," Jeffri said.