Fuji Heavy Industries Ltd. (FHI), the maker of Subaru automobiles, today announced that it has signed a memorandum of understanding (MOU) to enter into a consignment production contract with Tan Chong Group for the local assembly of Subaru vehicles in Malaysia.

The contract will be made and entered into by and between FHI and TC Subaru Sdn. Bhd, the distributor of Subaru vehicles in Malaysia. Production will begin in October 2012 at an existing production facility of Tan Chong Motor Assemblies Sdn. Bhd (TCMA) with a production capacity of 5,000 units a year. Subaru compact SUVs (Forester, Outback) will be locally-produced and marketed in Malaysia, Thailand and Indonesia through the Subaru sales and distribution network of Tan Chong Group.

FHI has established a strong partnership with Tan Chong Group since 1987, when it was appointed the Subaru distributor in Singapore as Motor Image. Tan Chong Group has been expanding the sales and distribution network of Subaru vehicles across ASEAN countries that now include Cambodia, Southern China, Hong Kong, Indonesia, Malaysia, Philippines, Taiwan, Thailand and Vietnam.

Motor Image expects to increase revenues by over 10 fold within the first year of introducing the XV concept model in the three markets under this MOU.

Key to the company's growth, is also in driving strategic expansion for its sales and distribution network in the region. Over the next two years, the Group aims to expand its sales network by 10 times adding 60 new outlets in Malaysia, Indonesia and Thailand. Currently, the company has a network of 76 sales and distribution outlets across 10 markets.

Mr. Glenn Tan, Executive Director of TCIL and Group Chief Executive of Motor Image Group says, "We believe that this development will enhance our growth in the ASEAN region. The steady growth of consumer purchasing power in the region opens extremely positive perspectives and market potential for Subaru. We continue to be focused on delivering superior quality vehicles and a consistently high level of service to customers."

"The agreement will allow us to rapidly scale up on Motor Image's presence in the region through making investments in our network and building long-term relationships," adds Tan.