Motorcycle industry background

Boon Siew Honda Sdn Bhd, is a 50/50 joint venture formed in 2008 between Honda Motor Co., Ltd. and Oriental Holdings Bhd. Prior to this, Boon Siew Sdn Bhd was responsible for the wholesale business of Honda motorcycle products in Malaysia and contracted their final assembly to Kah Assemblers Sdn Bhd, a wholly-owned subsidiary of Oriental Holdings Bhd. Upon the formation of the new JV, Honda obtained 50% of the outstanding shares of Kah Assemblers Sdn Bhd from Oriental Holdings Bhd, and established a 50/50 joint venture with Oriental Holdings Bhd. Production and sales operations were then consolidated under the new company.

Hong Leong Yamaha started in 1978, when Hong Leong Industries Bhd & Yamaha Motor Co Ltd of Japan signed the franchise agreement to venture into the manufacturing, assembling and marketing of Yamaha motorcycles in Malaysia. The Hong Leong Yamaha Complex was opened in 1997 and occupies 36 acres of land. It accommodates three companies; Hong Leong Yamaha Distributors (the marketing arm), Hong Leong Yamaha Motor (the assembler & manufacturer of components & metal parts) and Hong Leong Yamaha Research Centre.

Suzuki Assemblers Malaysia SDN BHD was established in 1971 and manages the assembly, sales and after sales of Suzuki motorcycles. Engines are supplied by a subsidiary, Hicom Suzuki Manufacturing Malaysia Sdn Bhd. The firms' equity is split between Suzuki Motor Corporation (Japan) (51%), Hicom Holdings Berhad (29%) and Silverstone Corporation Berhad (20%).

Kawasaki arrived in 1988 and now occupies a 35,000 sq ft facility at Hicom Glenmarie Industrial Park (Hicom’s first industrial park) which includes a CKD assembly plant with a monthly output capacity of up to 1,000 units. The plant was the first in the region to assemble the ER-6n and 2008 saw the launch of the Ninja 250R.

Modenas is the principal national brand and is backed by three parties: DRB-Hicom Berhad (70%), Kawasaki Heavy Industries (19%) and Sojitz Corporation (Formerly Nissho Iwai Corporation, Japan) (11%), with Kawasaki providing technology support.

Malaysia has long protected its automobile manufacturing industry from foreign competition using high tariffs and non-tariff trade barriers as defined in the National Automotive Policy, which focuses on the sustainability of the domestic automotive industry.

Malaysia has an indigenous vehicle industry, a sizeable automotive component sector, and some research and development (R&D) capability. The industry began life in the mid-1960s, assembling vehicles for European and Japanese car makers. A new phase began in 1983, when the government established Proton, the first national car project, with help from a Japanese conglomerate, Mitsubishi. In 1992, a second national car project, Perodua, came into existence, with help from Daihatsu and in 1996 Modenas motorcycles was launched with the support of Kawasaki Heavy Industries.

The government has slowly started to dismantle some of its protection measures in order to meet its commitments under the WTO and the ASEAN Free Trade Agreement (AFTA Agreement). Continued protection is necessary due to the vulnerability of Proton, Perodua and Modenas. Total employment in automobile manufacturing and related industries in 2008 reached 321,121 or 3% of the total workforce. The current National Automotive Policy (NAP), aims to streamline the domestic car industry to the two national high volume car producers. The government hopes to encourage cooperation between them and international companies in order bring in “best practice management” to the industry and raise standards. Following domestic national car programs and a focus on car sales and production, Malaysia retained the highest level of passenger car sales in ASEAN in 2009 with 486,342 vehicles sold. Meanwhile, Modenas' product development has also lagged behind the competition. With its technology provider present independently in the market, the future looks bleak if protection is reduced.

DRB-Hicom is a major player in the Malaysian automobile industry, participating in some of the key motorcycle companies. In 2006 DRB-HICOM Berhad was acquired by Etika Strategi Sdn Bhd and became one of the three flagships of the AlBukhary Group of Companies, led by one of Malaysia’s most influential and connected businessmen, Tan Sri Syed Mokhtar Al Bukhary.

DRB-Hicom Group

HICOM-HONDA Manufacturing(Malaysia) Sdn Bhd

Motorcycle Engines & Components

HICOM-YAMAHA Manufacturing(Malaysia) Sdn Bhd

Motorcycle Engines & Components

Motosikal Dan Enjin NasionalSdn Bhd (MODENAS)

Motorcycle Manufacture and related Components

Suzuki Motorcycle Malaysia Sdn Bhd

Motorcycle Engines & Components

Motorcycle Import Duty

Most Favoured Nation

CBU: 30% CKD: 0-10%


CBU: 0%

Excise Duty for CBU and CKD


Conditions for motorcycling

State sponsored domestic car manufacturers and a relatively high GDP per capita, help create an environment for the early adoption of the automobile compared to neighboring countries. Although a high percentage of Malaysians live in urban areas, many live in houses with private secure parking and enjoy a well developed road system.

The importance of motorcycles is reflected in the high ratio of 2-wheelers per 1000 people. Approximately 80% of all 2-wheelers are of the underbone style and the Cantonese nickname of Kapchai has become universally recognized. Blessed with many open spaces, Malaysia pioneered separate vehicle lanes, with motorcycles physically isolated from other vehicles in order to reduce traffic accidents involving 2-wheelers.

Malaysia was also a pioneer participant in motorsports, staging the first Malaysian Motorcycle Grand Prix in 1991. Three different venues have seen action with Shah Alam, Johor and, since 1999 to the present day Sepang. Underbone motorcycle races are staged in cities nationwide as part of the national Cub Prix Championship which enjoys a strong public following. As motorsports once inspired Japanese makers to technical excellence, in Malaysia this participation has established the sport as a major tourist attraction and raised the profile of the country on a global scale.