UMW Toyota Motor (Malaysia)

History

Toyota vehicles were first imported into Malaysia in August 1956, with the first completely built-up (CBU) unit being a Land Cruiser. Toyota signed distributor agreements with various Malaysian partners prior to UMW Toyota Motor, namely Car Motor (September 1960–February 1974), Emastorin Motor (September 1979–April 1984) and Sarin Motor (January 1979–February 1983). Additionally, several companies had also been appointed as importers and assemblers of Toyota's completely knocked-down (CKD) kits, with the most prominent CKD assembler being Champion Motor (CM). Other CKD assemblers include Borneo Motors (September 1967– September 1982) and Sarawak Motor Industries (SMI).

In the 1970s, Malaysia experienced an economic boom as a result of increased industrialisation. Japanese companies heavily invested in Malaysia during this period. Assembly of the Toyota Corolla and Toyota Corona began in February 1968 at Champion Motor's factory in Shah Alam. Champion Motor was an independent company that had previously assembled non-Toyota models, including those from the likes of Chevrolet, Mercedes-Benz, Vauxhall and Volkswagen. Champion Motors was later renamed Assembly Services Sdn. Bhd. (ASSB) in April 1975.

In March 1980, Toyota set up a representative office in Kuala Lumpur, and in October 1982, Sejati Motor was established through a joint venture between Toyota and United Motor Works (UMW). Sejati Motor acquired Assembly Services Sdn. Bhd. (ASSB), and in October 1987, Sejati Motor was renamed UMW Toyota Motor Sdn. Bhd. (UMWT). ASSB remained a subsidiary of UMWT ever since, as the exclusive assembler of Toyota vehicles in Malaysia. However, Toyota's plans for expansion into the Malaysian market were drafted just prior to the advent of Proton and the mid-1980s economic crisis, both of which had severe implications on Toyota's sales and investments. Nonetheless, UMWT continued to develop their investments and the Toyota brand eventually became the best-selling non-national badge in the Malaysian market, a title which UMWT held for over 20 years. However, in 2014, UMWT lost their coveted title to Honda Malaysia Sdn. Bhd. (HMSB).

In 2006, UMW Toyota Motor was awarded the rights to exclusively distribute Lexus vehicles in Malaysia. Cumulative Toyota vehicle production in Malaysia reached 1 million units in 2011. As of late 2015, UMW Toyota officially distributes a total of fourteen Toyota models, six of which are assembled by ASSB, while all nine Lexus models are fully imported.

Local production

Prior to the 1960s, Malaysian market Toyota models were only imported as completely built up (CBU) units. By the 1960s, the Malaysian government began to emphasise industrialisation, then viewed as a more dependable economic sector for employment and economic growth. In May 1964, the Malaysian government enacted a policy to encourage the local assembly of vehicles and manufacturing of automotive components, as per the recommendation of experts from the Colombo Plan. The new policy made completely built up (CBU) cars more expensive through the addition of import duties, and licenses were issued to various car companies who were interested in setting up local assembly plants. Cars that were locally assembled with Malaysian manufactured components, then limited to low-value parts like tyres, lights and batteries would be granted a reduction in import duty, making them cheaper and more competitive as a result.

Toyota responded quickly, and by February 1968 local assembly of the Toyota Corolla and Toyota Corona had begun at the Assembly Services Sdn. Bhd. (then named Champion Motor) plant in Shah Alam. Initially, Toyota exported completely knocked down (CKD) kits from Japan to Malaysia, where they would be assembled by ASSB's workers. During this early period, ASSB was an independent third party not officially part of the Toyota network. ASSB would end up benefiting from significant technology transfer through their Japanese partner, as production engineers from Toyota contributed to the design of ASSB's plant and advised on the assembly of vehicles. The Malaysian public, traditionally accustomed to European cars up until the 1960s were initially sceptical of the new Japanese cars. However, by the mid-1970s, the Toyota Corolla had grown rapidly in popularity to become a best-seller in the Malaysian market, second only to the Datsun 120Y. The success of the Corolla was largely attributed to its admirable durability and reliability, something which many of its European counterparts could not match. The partnership between ASSB and Toyota became very successful by the late-1970s and early-80s, and Toyota would end up buying ASSB altogether through UMW Toyota Motor (then named Sejati Motor) in October 1982.