Chapter 5 History of DENSO Malaysia Group
Beginning of the Automotive Industry in Malaysia
After Malaysia gained its independence in 1957, European companies started completely knocked down (CKD) automobile production in the 1960s. Japanese companies entered the market during the latter half of the same decade. All of them were joint ventures with local companies, and the automotive industry was developed as an import-substituting industry. However, due to the small domestic market in Malaysia, none of them could enjoy an economy of scale.
Japanese companies capitalized more than 70% of the domestic market (including passenger cars and commercial vehicles) before the establishment of the national car company, Proton. Although the main parts were imported for CKD production, local companies with joint ventures or alliances with foreign companies produced some parts.
In the 1980s, the Malaysian government started import substitution for heavy industries, including the automotive sector. Manufacturing businesses in Malaysia were mainly run by foreign-owned and Malaysian Chinese (Chinese-ethnic Malaysian) companies. The government intended to expand the entry of Bumiputera companies into the manufacturing sector in keeping with the New Economic Policy (NEP)2, which started in 1971. As Bumiputera companies limited resources and capital including experience the government has initiated industrialization by establishing public companies (government-owned or linked companies).
Public companies played significant roles in leading industrialization after the 1970s. In particular, the Heavy Industry Corporation of Malaysia (HICOM) established in 1980 to play the role as a promoter of heavy industries. HICOM set up joint ventures mainly with Japanese companies. As a conglomerate, it included in its portfolio not only the first national car manufacturer, Perusahaan Otomobil Nasional Bhd (Proton), but also joint ventures of cement, steel, and motorcycle manufacturing. The decision to have joint ventures with Japanese companies mainly influenced by the Look East Policy and the increasing global presence of Japanese companies in heavy industries.
Automotive industry play signication role in leading Malaysia industrialisation. In 1980, Heavy Industry Corporation of Malaysia (HICOM) has been established to promote the industry. As Bumiputera companies limited resources and capital including experience the government has initiated industrialization by establishing public companies (government-owned or linked companies). HICOM has setup a joined venture mainly with Japanese company as well know Nippondenso was the first company.
1980 - Establishment of Nippondenso (M) Sdn. Bhd.
The humble beginning of DENSO Malaysia can be tracked back since April 1980, called Nippondenso Malaysia, where located at Wisma Lim Foo Yong, Kuala Lumpur.
1983 - Start of Production Starter Line and Wiper Line
After three years of hard work on the factory setup together with Japan support, we were able commencing our first production for Starter and Wiper line. We started with 8 to 10 associates which now has expanded to 1912 associates within the organization.
1983 - First Product Shipment to ASSB
Collaboration within the organization successfully lead to complete the first delivery to ASSB (Toyota) fulfilling customer satisfaction, from the achievement we have expanded our production line following the demand from our customer.
1987 - Start of Supply to PROTON
The national car project in Malaysia which was referred to the Industrial Master Plan (IMP) and its future plan was drawn up in the Medium-and Long-Term Industrial Master Plan Malaysia (IMP), 1986-1995. In response to the IMP, new national car namely Proton project has been introduced. The IMP showed Proton’s role in developing local parts manufacturers during the period, and few policies were introduced.
Complexity in the automotive production, Proton under the leadership of Prime Minister Dr. Mahathir Mohamad, has taken initiative in establishing a joint venture within Japanese companies starting 1983.
In response to the IMP, new national car project been introduced. With the establishment of Proton, Nippondenso has been appointed as Proton part supplier. We are honored to be associated with Proton, Malaysia first national car assembler.
1992 - Completion of 2nd Thermal Systems Plant
New production facility to cater for the business expansion in the future.
As known in 1987, Nippondenso successfully signed an agreement with the first Malaysian national car manufacturer, which at that time was Proton Saga products from Japan's Nippondenso Corp., namely radiators, were well-received all over Malaysia – with the positive response on their great quality and affordable prices. With this success coming two years later in 1994, we managed to open the Second Thermal System Plant. With the new expansion of plant including collaboration and skill enhancement, Nippondenso have achieved 1 million Radiator Production in 1995.
1996 – Changed Corporate name to DENSO Malaysia Sdn. Bhd.
The name was changed to DENSO Malaysia in line with the change in corporate name globally.
1996 - Handover of Electronics Plant and First Machine Installation at Electronics Plant
With proven capability of our organization and Malaysia social economy stability, Japan has expand Malaysia as one of the electronic plant which to be setup outside the region. Malaysia has been chosen considering its strategic business environment and country’s vast experience in electronic business.
DENSO Malaysia fully committed in setting up its first machine installation at Electronics Plant.
2004 – Relocation of Sales & Marketing Division Office
In order to meet the demand and to provide fast response to our customer, our Sales & Marketing Division shifted to new location at Glenmarie Shah Alam nearer to the customers.
2014 to Present – Business Expansion in Electronics sector
Within the recent years, electronic controls have been increasingly adapted in various vehicle systems. The semiconductors’ performance evolves continuously to enhance the safety standards of growing demands for semiconductors to full autonomous electric vehicles. We were honored to be selected as one of the manufacturers, therefore DENSO Malaysia has expanded the semiconductor business. Start with Device Production on Monolithic Integrated Circuit.
In year 2016, we were able to produce 1ST ECU Abilcore production in DENSO Group within globally, which also contribute to the environment for the solder free machine.
2019 – DENSO subsidiary Nippon Wiper Blade merged with DENSO Corporation. Following from the organization direction, together DENSO Malaysia and DENSO Wiper System Malaysia (DNWSM) collaborate sharing knowledge, skills and expertise to strengthen their capabilities within DENSO standard.
2021 – DENSO Malaysia Embarks on RM160 Million Advance Semiconductor Production
DENSO Malaysia has ventured into the semiconductor production, ASIC named “Exposed Package (Ex-PKG)”, which is competitive in terms of high functionality, efficient high heat dissipation, miniaturization and cost reduction. This project was also in line with the Government's National Automotive Policy (NAP) 2020 to develop critical components within Next-Generation Vehicles, mobility technology and autonomous driving.
The investment will establish fully automated machine production lines with DENSO-designed manufacturing equipment and unique processing techniques that emphasize on high efficiency and high quality. The transfer of the product knowledge will also develop the local engineering skills among its workforce, through the dedicated DENSO’s “Hitozukuri (human resource development)” concept. In addition, the introduction of fully automated production lines will accelerate the moving toward Industry 4.0 technologies, such as IoT deployment, big data management and factory automation in Malaysia.
DENSO MALAYSIA continues serving as the manufacturing and distribution hub that supplies to DENSO in Japan and other DENSO group companies covering North America, China, Europe, and other regions. DENSO will continue to promote and export automotive parts hence contribute to the growth of the automotive industry in the country and region.