Already overcapacity, Perodua considers purchasing Tan Chong’s Serendah factory for RM500 million – report – paultan.org

To refresh your memory, Perodua Sales Sdn Bhd (PSSB) and Tan Chong Motor Assemblies Sdn Bhd (TCMA) signed a letter of intent (LOI) last month for the latter to provide electro-deposition coating and painting line services, as well as rental and use of certain designated assembly lines, for the Perodua QV-E.

The edge now reports, citing executives with knowledge of the deal, that Perodua is considering buying Tan Chong’s Serendah factory – located just 3km away from the former Sungai Choh base – for about RM500 million.

“Perodua is leasing a capacity of 30,000 units per year at Tan Chong’s Serendah factory, which has a production capacity of about 40,000 units per year. It is also exploring the possibility of acquiring the Serendah factory,” one of the executives said, adding that the lease deal is expected to contribute about RM80 million to Tan Chong.

It seems to be a win-win situation. Perodua is already operating above maximum capacity of 320,000 units per year (the two factories – Perodua Manufacturing Sdn Bhd and Perodua Global Manufacturing Sdn Bhd – combined), while Tan Chong faces underutilization at its Serendah and Segambut factories, which have a combined capacity of 65,000 units per year, research analysts say.

The edge writes that according to a November 26 report by Kenanga Research, Tan Chong has a production capacity utilization rate of 13% (8,450 units). Only 7,785 Nissans found homes in Malaysia last year – TCMA Serendah currently assembles the Serena and Almera, while TCMA Segambut makes the X-Trail, as well as non-Nissan vehicles such as the GAC GS3 Emzoom, GAC Emkoo and TQ Wuling Bingo.

The edge reports that Kenanga Research forecasts a net loss of RM185.5 million for Tan Chong in FY2025 and a net loss of RM164.3 million in FY2026, while RHB Research forecasts RM166 million and RM107 million respectively. In the first nine months of 2025, the company’s net loss shrank to RM114.3 million from RM146.11 million in the same period last year, while revenue rose 3.23% to RM1.62 billion.

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