A Malaysian automotive company has requested approval to establish a factory in Cambodia to assemble Nissan automobiles and manufacture spare parts for the vehicles, a government official said yesterday.

Eang Sophallet, a spokesman for Prime Minister Hun Sen, said the premier met the visiting chief executive of Tan Chong Motor Holdings Berhad (TCMH Group) this week, who sought the government’s support to build an automobile-assembly and spare-part plant in Cambodia.

TCMH Group is the franchise holder of Nissan vehicles in Malaysia and the IndoChina region. The company operates assembly plants in Malaysia, Vietnam and Myanmar, and holds distribution rights for Nissan vehicles in Cambodia and Laos.

Sophallet said that the company executive also met an official from the Council for the Development of Cambodia (CDC) to better understand the procedures for investing in the Kingdom.

“[TCMH Group] has already sought approval from the CDC and is working on the procedures,” he said, adding that no details on the location of the factory or size of investment were available.

He added that Hun Sen supported the project, which aligns with the government’s 2015-2020 Industrial Development Policy.

Sophallet said Cambodia’s growing economy, low-cost labour and competitive investment regime has piqued the interest of automakers.

South Korean automaker Hyundai Motor Company has been assembling Hyundai vehicles in Cambodia since 2011, while American manufacturer Ford Motor Company and Chinese automaker Great Wall have also established local plants.

Peter Brongers, president of the Cambodia Automotive Industry Federation (CAIF), said automakers that establish assembly plants in Cambodia benefit from its attractive investment climate, geographical location and membership in the ASEAN Economic Community.

“I would say that Cambodia is for [automakers] a good supply base for the Cambodian, Laotian and maybe even the Vietnamese markets,” he said.

He added that as the local market was still small, automakers must look to export a share of their production, but in the medium or long term full domestic sales would be viable.