BYD switches to contract assembly, boosting Sime Darby and raising Inokom capacity concerns

BYD Co Ltd has scrapped its standalone assembly plant in Tanjung Malim, Perak, and will pursue a contract assembly approach, according to statements from its Malaysia managing director Jacob Ma. The decision redirects the project to an existing contract assembler, with Inokom Corp Sdn Bhd—51% owned by Sime Darby's Sime Motors—considered the frontrunner. BIMB Securities Research highlights that this shift reduces execution and policy risks for BYD while offering incremental upside for Sime Darby, though the scale depends on final partner confirmation and production timelines.

Inokom already runs EV lines for brands like Chery and BMW at its Gurun, Kedah facility, but its capacity is flagged as near full, potentially limiting BYD volumes without additional investment. The change also sidesteps stringent Ministry of Investment, Trade and Industry requirements, such as sales caps and export obligations, that applied to new greenfield projects. BIMB retains a neutral stance on the broader automotive sector, keeping Sime Darby as a top pick with a hold rating, and notes ancillary beneficiaries such as Bermaz Auto, Pecca Group and APM Automotive Holdings.