In a bid to ramp up vehicle production in ASEAN. auto parts manufacturer Denso Cambodia has announced the construction of a new $19 million plant in the Phnom Penh Special Economic Zone.
The facility will produce magnetos and oil coolers with production slated to begin in March 2016, according to a Friday press release.
“The new plant, which is located in the Phnom Penh Special Economic Zone where DENSO Cambodia Co, Ltd. operates its existing plant, will support the increasing vehicle production in the ASEAN region,” the press release stated.
Denso Cambodia is a subsidiary of Japan-based Denso Corporation, a global automotive supplier with 200 subsidiaries in 35 countries.
Seng Chanthy, administrative manager at Denso Cambodia, told the Post in October that the company’s existing plant has been producing sensor components for ignition devices and shipping them back to Denso Thailand, where they are assembled into bigger automobile parts.
Denso Cambodia registered its $10 million investment in Cambodia in March 2013 and has been renting space in PPSEZ since July of that year.
Denso is not the first Japanese manufacturer in Cambodia which provides basic parts to be assembled in neighbouring countries.
Minebea, a Japanese electronics manufacturer, opened a $60-million plant in PPSEZ in 2011 to produce micro actuators, power brushless motors, and other parts for plants outside the Kingdom.
Pily Wong, vice president of the Cambodian Automotive Industry Federation and CEO of Hung Hiep (Cambodia) – Cambodia’s Volkswagen distributor – said the Kingdom needed to boost its sales of new cars so that factories could eventually produce for the local market as well.
“To boost new car sales, the government should consider reducing the tax on importing new cars so that more Cambodians can afford new cars instead of secondhand ones,” he said.
“Basically, I think if we can sell from 4,000 to 5,000 cars per [automobile] branch a year, it would be enough for investors to consider producing to supply to local market. I would want to have a wide range of spare parts which I can find locally without having to pay tax to import,” he added.