In a filing with The Stock Exchange of Hong Kong, Tan Chong International Limited (TCIL) and Subaru Corporation have announced they will end complete knock down (CKD) operations in Southeast Asia.

“After careful consideration, TCIL and Subaru Corporation have jointly decided to undergo a proactive business transformation by phasing out the existing CKD business model, which is believed to be no longer sustainable in the long term,” read the business update.

“From next year, the CKD markets in Thailand, Vietnam, Malaysia and Cambodia will transition to a complete build up (CBU) sales model from Japan,” it continued. Despite the move, both parties will continue to explore additional viable business avenues together in these markets.

From a Malaysian context, Tan Chong Motor Assemblies (TCMA) – a subsidiary of Tan Chong Motor Holdings (TCMH) – in Segambut makes the second-generation XV for local and export markets. The company also previously assembled the fourth-generation Forester, although assembly of the fifth-generation model was shifted to Thailand. TCIL and Subaru Corporation formed a joint venture – Tan Chong Subaru Automotive (Thailand), or TCSAT – in February 2017 to assemble Subaru vehicles in Thailand.

“TCIL and Subaru Corporation are confident that this strategic decision will position Subaru for continued success in these dynamic markets. As TCIL embarks on this new chapter together with Subaru Corporation, both TCIL and Subaru Corporation remain steadfast in their commitment to delivering exceptional value to customers, partners and stakeholders,” the statement ended.

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