BYD deal puts Inokom in the driver’s seat

By the Editorial Team · Tuesday, October 20, 2026

BYD Malaysia has partnered with Inokom to assemble electric vehicles locally, using Inokom’s existing facilities instead of building a new plant, aiming to avoid previous sales restrictions and reduce costs. This move could accelerate EV production and make BYD’s vehicles more competitively priced, potentially influencing other automakers to adopt similar collaboration strategies in Malaysia’s rapidly growing EV market.

BYD Malaysia Sdn Bhd’s decision to assemble electric vehicles (EVs) locally through Inokom Corp Sdn Bhd marks a significant shift in its strategy and may lead to more competitively priced EVs in the Malaysian market. The Chinese automaker recently signed a memorandum of understanding with Inokom in Shenzhen on October 15, choosing to use the local assembler’s existing facilities rather than building its own manufacturing plant.

This approach allows BYD to leverage Inokom’s established manufacturing infrastructure, skilled workforce, and supply chain, potentially accelerating production timelines and reducing upfront capital expenditure. Previously, BYD had proposed building a plant in Tanjong Malim, Perak, but abandoned the plan amid limitations that restricted domestic sales to 20% of production and imposed a minimum on-the-road price of RM100,000. Under the new partnership, BYD may no longer face these sales restrictions, although the terms of the revised approval have yet to be finalized.

Inokom, which operates a 200-acre assembly plant in Kulim, Kedah, currently runs at about 80% capacity. The facility, known for assembling vehicles for brands including BMW, MINI, Porsche, Mazda, Hyundai, and Chery, is expected to begin BYD vehicle assembly in the coming months. The company has also recently expanded its operational capabilities with a RM300 million paint shop, doubling its annual painting capacity to 100,000 vehicles. Kia’s planned relocation of its completely knocked-down (CKD) operations away from Inokom to Stellantis’ Gurun plant may create additional capacity, potentially accommodating BYD’s production volumes.

Market analysts from TA Research described BYD’s partnership with Inokom as a pragmatic move that could enhance BYD’s competitiveness through improved pricing and availability. However, they cautioned that any cost savings might be offset if passed on to consumers, limiting profit margins. The research firm predicted that the partnership would yield only a modest earnings contribution to Sime Darby Bhd and Bermaz Auto Bhd (BAuto), majority and minority stakeholders in Inokom respectively. For example, assembling 10,000 BYD units annually at an estimated net profit of RM500 per vehicle could generate approximately RM5 million in additional net profit for Inokom, translating to less than 1% of Sime Darby’s and BAuto’s projected core earnings for the 2027 financial year.

The move is seen as potentially catalytic for the broader automotive industry, encouraging other foreign manufacturers to collaborate with local assemblers instead of investing in costly new plants. This development arrives amid rapid growth in Malaysia’s EV market, where registrations nearly doubled in the first nine months of 2026 to 53,500 units, representing 8.4% of all new vehicle registrations compared to 4.4% a year earlier. Proton’s e.MAS leads with 24,900 registrations, followed by BYD at 8,100 units.

Despite growing adoption, increased competition, especially from Chinese brands employing aggressive pricing, continues to apply pressure on margins across the sector. TA Research maintains a neutral outlook on the automotive industry, highlighting that intensified market rivalry, particularly within the EV segment, could constrain profitability for existing players, especially those heavily reliant on imported vehicles. Meanwhile, BAuto’s earnings outlook remains supported by a recovery in Mazda’s sales and margins, underscoring the ongoing importance of established brands in the local market.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.