German carmaker Volkswagen AG will make its new Passat and Jetta cars in Malaysia by late 2011 in a 1 billion ringgit ($318 million) venture inked Tuesday with local auto group DRB-Hicom Berhad as it seeks to expand in Southeast Asia. DRB Managing Director Mohamad Khamil Jamil said DRB will foot 70 percent of the investment, with the rest from VW mainly to build production infrastructure and for training and quality control at DRB's existing plant in Pekan in central Pahang state. The VW cars, due to roll out by the fourth quarter of 2011, will be sold in Malaysia and later possibly exported to other Southeast Asian nations, the Associated Press reported. Mohamad Khamil said DRB will initially produce some 3,000 VW cars annually before expanding output from the end of 2012. DRB's Pekan plant _ which also assemble vehicles for Mercedes Benz, Suzuki and Mitsubishi _ has a production capacity of nearly 100,000 vehicles a year but only a third of that is utilized, he said. DRB will set up a vendor network to increase the proportion of Malaysian-made parts in VW cars to 40 percent in the long run, he said.
