When others depart, Volkswagen Group comes knocking

AT a time when concerns were raised of foreign direct investments (FDIs) leaving the Malaysian shores, the Volkswagen Group has provided some relief by setting up its new regional parts distribution centre (PDC) in Port of Tanjung Pelepas, Johor.

The strategically located facility aims to provide a robust genuine parts supply chain to 21 markets in the Asia Pacific region.

With this larger facility of 50,000 sq metres, the new regional PDC can now store more parts than its predecessor, thus extending the range and depth for better parts availability.

There are approximately 65,000 genuine parts within the Group’s brands of Volkswagen passenger cars, Audi, ŠKODA, and Volkswagen commercial vehicles.

Volkswagen Group follows the increasing trend of the establishment of global and regional distribution hubs in Malaysia by companies in industries such as automotive, life sciences and medical devices, electrical and electronics, and machinery and equipment, according to Senior Minister and Minister of International Trade and Industry (MITI) Datuk Seri Mohamed Azmin Ali.

“These companies seek to tap on Malaysia’s strategic location as well as our efficient and reliable infrastructure such as ports, airports and financial institutions, that allow them to improve operational efficiency and optimise product and service quality and speed for their customers,” he pointed out.

“Robust connectivity is paramount in enabling their investment and human capital to flow more freely across borders.”

Volkswagen’s warehouse


Volkswagen Group sales head Dr Christian Dahlheim said the Asia Pacific region offers a lot of growth potential for the Volkswagen Group, especially when it comes to e-mobility.

“Our electric product range already consists of very attractive models like the Volkswagen ID.3 and ID.4 as well as the Audi e-tron that is fast growing,” he shared.

“Apart from the vehicles, a strong after sales performance is key for customer satisfaction. Malaysia offers a central and well-connected location which perfectly suits our plans to expand our foothold in the region.”

The new site offers improved distribution and process efficiency. Located in the free trade zone with direct port connectivity, the warehouse processing is enhanced by as much as 15%.

Moreover, the prime location is well-linked to the air hubs and roads, thus enabling better hub-and-logistics flow with faster cargo turnaround.

The new facility is also customised to Volkswagen Group’s requirements where storage systems like semi-automated paternoster and vertical narrow aisle are built for better warehouse space and process optimisation.

In addition, value-added service is now offered to its customers such as re-packing and re-labelling at retail level for the ease of dealer distribution.

More broadly, investments in the likes of Volkswagen Group is part of the Global Trading Centre (GTC) scheme which was announced in Budget 2021 as part of Malaysia’s strategy to further encourage companies, both MNCs and local companies alike, to establish their global and regional distribution hubs.

The GTC scheme which comes under the purview of the Malaysian Investment Development Authority (MIDA) provides tax incentive and facilitation to ease import and export activities and aims to support companies in key manufacturing and services sectors which venture into procurement, distribution and trade activities to further strengthen their global supply chain. – Jan 14, 2021

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