LAST week, reports of a partnership between China’s Great Wall Motors Co Ltd and Go Automobile Manufacturing Sdn Bhd to manufacture energy-efficient vehicles dominated the newspapers. It was the first energy-efficient manufacturing licence from the government.
A whole lot of numbers was churned out: an investment of RM2 billion to manufacture the vehicles, RM700 million to be generated from banks and financial institutions in China, RM500 million to be spent on R&D and an initial investment of RM150 million to start production by September this year.
The second phase will involve the production of 50,000 cars, which will increase to 100,000 by 2018. Some 4,000 new jobs will be created.
Go Automobile CEO Ahmad Azam Sulaiman made most of the statements.
While all this sounds impressive, it will be interesting to see how Go Automobile obtains funding, considering that it doesn’t have a track record and was only set up in February this year.
It is also a wonder that there are no familiar names from the automotive industry in these companies. So, can Go Automobile do what it says it can?
Checks with the Companies Commission of Malaysia reveal that Go Automobile’s 94.75% parent is W&R Resources Sdn Bhd while the remaining shareholders are Ahmad Azam and one Muhadzir Mohd Isa.
W&R Resources, meanwhile, is equally owned by Wan Ahmad Wan Omar and Farok Maasom.
In its financial year ended June 30, 2013, W&R Resources posted a net profit of RM29,856 on revenue of RM2.4 million.
Great Wall Motors, listed in Hong Kong and Shanghai, is China’s largest SUV and pick-up manufacturer and has an annual production capacity of 800,000 units. It sold about 770,000 units last year, making it the eighth largest automaker in China.
However, in Malaysia, Great Wall Motors sold 281 units last year, up from 173 in 2012. Is something amiss here or are we just being overly sceptical? Should the government explain why it chose to award the licence to the duo?
This story first appeared in The Edge Malaysia Weekly Edition, on April 14 - April 20, 2014.