UPDATE: MeGroup to set up additional assembly line and become Honda used-car dealer

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This item was originally published on Monday, 11 October 2021 at 22:01 SGT; it has since been updated to include clarifications from the company. 

MeGroup said Monday it will set up a new facility in Kulim Hi-tech Park in Kedah, Malaysia, to expand its components manufacturing line and operate as its Northern manufacturing hub.

In addition, the company said Honda Malaysia has appointed it as an authorised used-car dealer under the Honda Certified Used Car (HCU) Program. Operations for the HCU program will begin at the start of 2022, with the existing Honda Cheras Dealership outlet to execute the pilot program, MeGroup said in a filing to SGX.

The used car dealership will be for the sale of various automobile brands, MeGroup said in a separate filing.

Construction of the new manufacturing facility  is expected to be completed and operational by the first quarter of 2023, MeGroup said.

The Northern manufacturing hub will cater to customers located in the Northern part of Malaysia, which will reduce delivery delays from the main manufacturing plant in Selangor, MeGroup said.

MeGroup will continue to produce NVH and non-NVH parts and supply them to various automobile brands, including Mazda, the company clarified in a second filing to SGX.

The main manufacturing plant’s energy saving initiative, via the installation of solar panels, is about 90 percent complete, which should result in immediate cost savings and a reduced carbon footprint, MeGroup said. In addition, automation of the first manufacturing line has been completed and the second line is in the process of being converted, the filing said.

Carol Wong, executive director of MeGroup, said that with these developments, the manufacturing business is poised to recover in 2022.

She said the goal is at least 70 percent automation in the main manufacturing plant, compared with the current 25 percent.

“In diversifying the group’s income stream, the dealership business was recently appointed by Honda Malaysia as an authorised dealer for used cars,” Wong said in the statement. “This pilot program will add on to our current dealership’s overall revenue contribution, and we hope to keep growing our used car segment under MeGroup’s dealership business.”