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DRB-HICOM Defence Technologies

DRB-HICOM Defence Technologies Sdn Bhd (DEFTECH) is a Malaysian defence contractor and wholly-owned subsidiary of DRB-HICOM Berhad, incorporated on 17 October 1996 to serve as a key industrial driver in the national defence sector. The company specializes in the design, development, manufacturing, and supply of armoured and logistics vehicles, as well as maintenance, repair, and overhaul (MRO) services, primarily for the Malaysian Armed Forces and homeland security applications. Notable products include the AV8 Gempita amphibious infantry fighting vehicle, the ACV-300 Adnan armoured personnel carrier, the Lipan Bara AV4 4x4 light armoured vehicle, and the Handalan heavy logistics truck, which support the Royal Malaysian Army's operational requirements. DEFTECH also extends capabilities into aerospace components, unmanned systems, and systems integration, contributing to Malaysia's indigenous defence production under frameworks like the Malaysia Aerospace Blueprint 2030. As a premier contractor, it maintains strategic partnerships with the Ministry of Defence and other stakeholders to enhance local combat and surveillance systems, while leveraging established supply chains for military-grade vehicles.

History

Establishment and Early Development (1996–2000)

![HICOM DefTech Handalan vehicle][float-right] DRB-HICOM Defence Technologies Sdn. Bhd. (DEFTECH) was incorporated on 17 October 1996 as a wholly owned subsidiary of DRB-HICOM Berhad, a conglomerate formed earlier that year via the merger of Heavy Industries Corporation of Malaysia Berhad and Diversified Resources Berhad. The company's founding supported Malaysia's drive for defense industrialization and self-reliance, with DEFTECH tasked to design, develop, manufacture, and supply armored vehicles, logistics platforms, and related services, primarily for land-based national security applications including maintenance, repair, and overhaul. From inception, DEFTECH concentrated on defense automotive activities, commencing with the supply of Handalan I and II 4x4 general service cargo trucks to the Malaysian Armed Forces, which represented its entry into military vehicle provision. These initial efforts emphasized marketing, sales, and delivery of military vehicles and associated equipment, establishing operational foundations amid limited early manufacturing involvement. Through 2000, DEFTECH operated from its headquarters in Shah Alam, Selangor, while preparing infrastructure for expanded production, such as facilities in Pekan, Pahang, to advance local capabilities in vehicle assembly and support. This phase solidified the company's role as a key contributor to Malaysia's defense ecosystem, prioritizing reliable supply chains for logistics vehicles before venturing into advanced armored systems.

Key Contracts and Expansion (2001–2010)

In 2001, DRB-HICOM Defence Technologies (DEFTECH) established a dedicated defence and security manufacturing plant in Pekan, Pahang, at a cost of approximately RM70 million (equivalent to about $22 million USD at the time), enabling expanded production of armoured vehicles. This facility, spanning 25.6 acres, supported flexible manufacturing for multiple vehicle types and incorporated in-house capabilities for resource generation and assembly. That same year, DEFTECH initiated collaboration with Turkey's FNSS Savunma Sistemleri to locally produce the ACV-300 Adnan infantry fighting vehicle for the Malaysian Army, building on earlier technology transfer agreements. Production and assembly of the Adnan and its variants commenced in 2003, with deliveries of 211 tracked armoured combat vehicles occurring between 2000 and 2009, achieving up to 76% local content by the program's later stages. DEFTECH secured its first major export contract in 2005, supplying 69 units of the indigenously designed Handalan II 4x4 logistics trucks to the Royal Brunei Armed Forces, marking an expansion into regional markets. In 2008, the company signed a contract with the Malaysian Ministry of Defence for 48 additional ACV-300 Adnan vehicles, further consolidating its role in fulfilling domestic armoured requirements. The period culminated in April 2010 with a landmark RM7.55 billion (approximately $2.5 billion USD) contract from the Malaysian Army for 257 AV8 Gempita 8x8 armoured wheeled vehicles, including technology transfer provisions, positioning DEFTECH for significant growth in wheeled armoured production. This deal, spanning seven years from 2011, underscored the company's maturation from assembly-focused operations to lead integrator in multi-role vehicle programs.

Modernization and Diversification (2011–Present)

In February 2011, DRB-HICOM Defence Technologies (DefTech) secured a contract valued at approximately RM4.28 billion from the Malaysian Ministry of Defence for the design, development, and supply of 257 AV8 Gempita 8x8 wheeled armoured vehicles, marking a significant modernization effort to enhance the Malaysian Army's mechanized capabilities with multi-role platforms featuring advanced mobility and firepower. Production commenced in 2014, with the first 12 infantry fighting vehicle variants delivered by December of that year, and full deliveries extending through 2020 to replace aging tracked vehicles and diversify the fleet toward wheeled systems for improved deployability. This program included technology transfer from Turkish partner FNSS Savunma Sistemleri, enabling local manufacturing and variants such as command post, anti-tank, and ambulance configurations. To broaden its scope beyond ground vehicles, DefTech acquired Composites Technology Research Malaysia (CTRM) in 2014 for RM298 million from the Minister of Finance Incorporated, integrating expertise in aerospace composites and paving the way for diversification into unmanned aerial systems and aircraft components. This move was followed by internal restructuring in 2017, placing CTRM subsidiaries directly under DefTech to streamline operations in systems integration and MRO services for aerial platforms. By 2022, DefTech unveiled its indigenously developed Tactical UAV for intelligence, surveillance, and reconnaissance, reducing reliance on foreign suppliers, with endurance up to 10 hours. Further diversification included the 2015 contract for 20 AV-4 Lipanbara 4x4 armoured vehicles, enhancing light tactical mobility, and expansions into commercial sectors such as specialized buses and logistics vehicles. In 2024, DefTech showcased prototypes of the Armoured Engineer NBC Reconnaissance Vehicle (AENBCRV) and Armoured Heavy Recovery Vehicle (AHRV) at DSA, alongside the completed Aludra EE UAV with a 120 kg MTOW and advanced ISR capabilities, while partnering with international firms for joint production like the Turkish EREN 4x4 in 2025. Modernization continued with the upgraded ACV-300 Adnan tracked vehicle prototype revealed in 2024, incorporating FNSS upgrades for enhanced combat effectiveness. These initiatives reflect DefTech's strategic shift toward integrated defence solutions, including unmanned systems and support vehicles, supported by contracts like the 2024 DSP support vehicles tender.

Corporate Structure

Ownership and Governance

DRB-HICOM Defence Technologies Sdn. Bhd. (DEFTECH) operates as a wholly owned of Berhad, a diversified Malaysian publicly listed on under the 1619. Incorporated on 17 1996, DEFTECH falls fully under the and strategic of its , with no minority shareholders or external interests reported in disclosures. Governance at DEFTECH aligns with DRB-HICOM Berhad's overarching framework, which prioritizes board oversight for strategy, risk management, and regulatory compliance, including a zero-tolerance policy on bribery and adherence to Malaysian corporate laws. The parent's board, comprising executive, independent non-executive, and senior independent directors, provides leadership and reviews subsidiary performance; as of 2025, it is chaired by Tan Sri Wan Zulkiflee Wan Ariffin (appointed chairman 1 September 2020), with Tan Sri Syed Faisal Albar Syed A.R. Albar serving as Group Managing Director since 1 March 2016. Other key board members include Dato’ Ibrahim Taib (senior independent non-executive director since 1 March 2022) and independent directors such as Puan Uji Sherina Abdullah (appointed 1 March 2023) and Madam Tang Saw Hua (appointed 18 February 2025), ensuring a mix of expertise in audit, nomination, remuneration, and sustainability committees. Subsidiary-specific governance at DEFTECH emphasizes operational autonomy within the parent's directives, focusing on defence contracting ethics and performance accountability, though detailed board compositions for the entity itself are not publicly itemized beyond integration into group structures. DRB-HICOM Berhad's annual reports and sustainability policies extend to DEFTECH, mandating whistleblower protections, human rights adherence, and ethical codes applicable across operations.

Divisions and Operational Units

DRB-HICOM Defence Technologies Sdn. Bhd. (DEFTECH) organizes its operations through core divisions focused on manufacturing and engineering, complemented by subsidiaries specializing in maintenance, aviation, and unmanned systems. The company's headquarters is in Shah Alam, Selangor, with key facilities including a manufacturing plant in Pekan, Pahang, and engineering operations co-located at the headquarters site. The Defence & Security Manufacturing Division, based in Pekan, Pahang on a 25.6-acre site established in 2001 for RM70 million, oversees the assembly, production, and research & development of armoured and logistics vehicles, including workshops for repair, maintenance, upgrading, and a dedicated R&D department utilizing CAD for design. This division supports DEFTECH's primary role in supplying military vehicles to the Malaysian Armed Forces. The Engineering Division, established on June 1, 2004, in Shah Alam with a 36,000 sq ft factory, concentrates on commercial vehicles, specialist body fabrication, and integration services, extending beyond pure defence applications to dual-use technologies. Subsidiaries enhance operational capabilities: Defence Services Sdn. Bhd. (DSSB), founded in 1987 with a plant in Nilai, Negeri Sembilan, provides third- and fourth-line maintenance, repair, and overhaul (MRO) for armoured vehicles, primarily supporting Malaysian Armed Forces requirements. DEFTECH Aviation Sdn. Bhd., established in 1990 in Melaka, specializes in composites manufacturing for light aircraft and MRO services for platforms such as the Airbus A320, Boeing B737, CN235, and BAE Hawk. DEFTECH Unmanned Systems Sdn. Bhd., incorporated in 2007 and located in Batu Berendam, Melaka, develops and provides unmanned aerial vehicle (UAV) solutions for surveillance, monitoring, and custom applications. These units collectively enable DEFTECH to handle end-to-end defence lifecycle support, from design and production to sustainment, while pursuing certifications for international standards.

Facilities and Research Capabilities

DRB-HICOM Defence Technologies operates its corporate headquarters in Shah Alam, Selangor, located at Lot 26, Jalan Pengapit 15/19, Section 15. This purpose-built complex accommodates administrative functions, engineering divisions, and support for product development activities. The company's primary manufacturing facility is situated in Pekan, Pahang, integrated within the broader DRB-HICOM Automotive Complex, which serves as Malaysia's largest automotive hub. This site features production capabilities for armoured fighting vehicles, logistics vehicles, and related systems, including assembly lines, testing grounds, and maintenance infrastructure tailored to defence requirements. Research and development efforts at DEFTECH emphasize collaborative partnerships rather than standalone internal centers, focusing on enhancing vehicle design, unmanned systems, and composite technologies. In March 2022, DEFTECH signed a memorandum of understanding with Universiti Pertahanan Nasional Malaysia to jointly pursue R&D in automotive engineering and unmanned aerial vehicle technologies. This was followed by a May 2024 collaboration agreement with the National Defence University of Malaysia to advance capabilities in unmanned aerial vehicles and automotive sectors, building on prior initiatives. DEFTECH also participates in tripartite R&D projects with the university and the Malaysian Armed Forces, particularly on unmanned ground vehicles, leveraging academic expertise to address operational defence needs. These efforts support DEFTECH's core competencies in vehicle prototyping, systems integration, and technology transfer for armoured and logistics platforms.

Products and Technologies

Armoured Fighting Vehicles

DRB-HICOM Defence Technologies (DefTech) specializes in the design, assembly, and production of armoured fighting vehicles (AFVs) tailored for the Malaysian Army, leveraging partnerships with international firms for technology transfer. Key models include the tracked ACV-300 Adnan infantry fighting vehicle (IFV) and the wheeled AV8 Gempita multi-role platform, both produced under license and with local enhancements at DefTech's facilities in Pekan, Pahang. The ACV-300 Adnan, a Malaysian adaptation of the Turkish FNSS ACV-15, features a one-man turret armed with a 25 mm Oerlikon KBA cannon and a coaxial 7.62 mm machine gun, capable of engaging armored targets at ranges up to 2,000 meters. Powered by a Detroit Diesel 6V-53T engine delivering 300 horsepower, it achieves a maximum road speed of 65 km/h and carries up to 13 personnel including crew. DefTech, in collaboration with FNSS, has delivered over 250 units since the early 2000s, with recent upgrades including a Sharpshooter remote weapon station and improved optics under a service life extension program announced in 2024 to enhance firepower and situational awareness. The AV8 Gempita, an 8x8 wheeled AFV indigenously developed by DefTech with Turkish FNSS assistance based on the Pars design, entered production following a 2010 contract for 257 vehicles across 12 variants, including APC, IFV, and anti-tank roles. The IFV-25 variant mounts a 25 mm automatic cannon with a 7.62 mm coaxial machine gun, supported by optional anti-tank guided missiles like the LCT30, and features amphibious capability with a top speed of 105 km/h powered by a Deutz TCD 2015 V6 engine producing 410 hp. Weighing approximately 29 tons, it provides STANAG Level 4 ballistic and mine protection, with deliveries commencing in 2015 to modernize Malaysian mechanized forces. DefTech also assembles lighter 4x4 vehicles such as the AV4 Lipanbara high-mobility armoured vehicle, a licensed variant of the Thai First Win, equipped with a Cummins ISB 300 hp engine for speeds up to 110 km/h and capacity for 8-11 troops in a V-hull chassis resistant to IEDs. Around 200 units were planned for Malaysian Army and police use, emphasizing rapid deployment in counter-insurgency operations.

Unmanned and Aerial Systems

DRB-HICOM Defence Technologies, through its subsidiary DEFTECH Unmanned Systems Sdn. Bhd. (DUS), develops and maintains unmanned aerial vehicles (UAVs) leveraging composite materials and aerospace engineering expertise. DUS was established in 2007 under a national initiative to create indigenous Malaysian UAV technology, transitioning from earlier efforts by Composites Technology Research Malaysia (CTRM). As the first and only Malaysian UAV entity accredited by the Directorate General of Technical Airworthiness (DGTA) as an Approved Maintenance Organisation (AMO) and Authorised Engineering Organisation (AEO), DUS provides design, development, testing, training, and maintenance services for military and commercial applications. The Aludra EE, a conventional take-off and landing tactical UAV, represents a key product in DUS's portfolio, with development completed by May 2024 following flight tests initiated after its debut at DSA 2022 and concluding in February 2024. It features a length of 3.28 m, wingspan of 4.86 m, maximum take-off weight of 120 kg, payload capacity of 10 kg, range of 100 km, endurance of 10 hours, service ceiling of 4,000 ft, and cruise speed of 40 knots, powered by a 25 hp two-cylinder piston engine. Designed for aerial surveillance, monitoring, search and rescue, infrastructure inspection, precision agriculture, and mapping, the Aludra EE awaits user trials with the Royal Malaysian Air Force. At the DSA 2024 exhibition, DEFTECH also unveiled the XB-M1, a vertical take-off and landing (VTOL) unmanned aircraft, expanding options for versatile aerial operations. DUS extends UAV applications beyond defense into commercial sectors, including pipeline and power line monitoring, topographic surveys, and emergency services support, supported by in-house facilities for simulation, wind tunnel testing, and certification. Accreditations include the Malaysian Good Design Mark from Majlis Rekabentuk Malaysia, the Industry Excellence Award from the Ministry of International Trade and Industry (MITI), and DGTA Certificates of Airworthiness. Recent efforts include developmental flight testing of tactical UAVs in May 2024 and collaborations, such as with Sichuan AOSSCI Technology Co. Ltd. in May 2024 to enhance unmanned aircraft systems, and with the National Defence University of Malaysia (UPNM) for R&D in UAVs and related technologies.

Logistics and Support Vehicles

DRB-HICOM Defence Technologies (DEFTECH) manufactures logistics and support vehicles primarily for military applications, including utility trucks and armoured variants for engineering, recovery, and reconnaissance tasks. These vehicles support operational sustainment, maintenance, and specialized hazard detection within the Malaysian Armed Forces and potential export markets. The HICOM Handalan serves as a multi-purpose utility engineering and support truck, designed for transporting personnel, equipment, and supplies in military logistics roles. Developed in collaboration with Isuzu, it features a 6HK1-TC engine with common rail direct injection, Allison automatic transmission, and a gross vehicle weight of 12,000 kg. Dimensions measure 6,742 mm in length, 2,960 mm in width, and 2,400 mm in height, with a wheelbase of 4,100 mm and fuel capacity of 200 liters. Suspension includes independent double wishbone front and leaf spring rear, paired with air-over-hydraulic brakes featuring ABS. DEFTECH also produces armoured support vehicles based on the AV8 Gempita 8x8 wheeled platform, enhancing logistics capabilities with protected mobility. The Armoured Engineer Nuclear Biological Chemical Reconnaissance Vehicle (AENBCRV), developed in partnership with Turkey's FNSS, equips Malaysian Army units with CBRN detection systems for identifying chemical, biological, radiological, and nuclear threats. It has a combat mass of 26,180 kg, a 3,000 kg payload, and is powered by a Deutz TCO 2015 V8 diesel engine; initial deliveries occurred in the first half of 2019. The Armoured Heavy Recovery Vehicle (AHRV), unveiled at the DSA 2024 exhibition, provides battlefield recovery functions with a 30-tonne capacity winch and crane, plus a front dozer blade for obstacle clearance. It incorporates self-protection measures suitable for contested environments, further diversifying DEFTECH's support vehicle portfolio.

Civilian and Dual-Use Products

DRB-HICOM Defence Technologies (DefTech) produces soft-skin and commercial vehicles as part of its land systems portfolio, a capability it has maintained since its incorporation in 1996. These offerings extend beyond purely military applications, supporting civilian logistics and utility needs through design, development, and supply. A prominent example is the DefTech Light Tactical Vehicle (LTV) 4x4 ambulance variant, adapted from a civilian base chassis such as the Mitsubishi Triton for enhanced reliability in mechanical components. This model features a 4-cylinder turbocharged engine, 4WD drivetrain with differential lock, and a payload capacity suitable for emergency medical transport, with dimensions of approximately 5,355 x 2,085 x 2,818 mm and ground clearance of 230 mm. Planned for deployment with the Malaysian Civil Defence Force (Agensi Pengurusan Bencana) and other health agencies, it addresses disaster response and paramedical requirements, as evidenced by facility visits and procurement discussions in late 2020. DefTech's Field Ambulance, another utility-based product on a similar 4x4 platform, incorporates common-rail direct injection fueling, 6-speed automatic transmission, and off-road capabilities including 40° approach/21° departure angles and 30% gradient climbing, positioning it for dual-use in both tactical field operations and civilian emergency services. While primarily aligned with defence logistics, such vehicles demonstrate adaptability for non-combat roles like humanitarian aid and civil protection, reflecting broader Malaysian efforts to leverage defence manufacturing for domestic resilience. In aerospace, DefTech Aviation provides composites manufacturing and maintenance, repair, and overhaul (MRO) services certified for advanced aviation applications, which encompass potential civilian sector uses such as commercial aircraft component servicing alongside military needs. These dual-use technologies, including unmanned systems with customizable composite structures, support diversification but remain predominantly oriented toward security enhancements rather than widespread civilian markets.

Major Contracts and Deployments

Domestic Malaysian Armed Forces Procurements

DRB-HICOM Defence Technologies (DefTech) has secured multiple contracts to supply armoured and support vehicles to the Malaysian Armed Forces, focusing on enhancing the army's mechanized capabilities through local manufacturing and assembly. Key procurements include the ACV-300 Adnan infantry fighting vehicle, where DefTech handled local assembly of a portion of the 211 units acquired by the Malaysian Army starting in the early 2000s, in collaboration with Turkish firm FNSS. Recent efforts involve a service life extension programme for the Adnan fleet, with DefTech unveiling upgraded prototypes featuring enhanced optics and data-sharing capabilities at DSA 2024. The flagship AV8 Gempita programme represents DefTech's largest domestic contract, awarded in April 2010 for 257 units of the 8x8 wheeled multi-role armoured vehicle, designed and produced locally with technology transfer from FNSS. Valued at approximately RM7.55 billion, the initiative included variants such as infantry fighting vehicles, mortar carriers, and command post vehicles, with final deliveries completed by December 2022. DefTech has since supported the fleet through maintenance contracts, including a RM99 million agreement for repairs and a recent tender for spare parts valued at around RM195,000. Additional contracts encompass logistics and support vehicles, such as a September 2024 award for 14 units under the Malaysian Army's Defence Strategic Programme. In 2016, DefTech signed agreements worth over RM191 million for various defence supplies, including RM33 million specifically for maintenance services. These procurements underscore DefTech's role in bolstering Malaysia's defence self-reliance via indigenous production and ongoing sustainment.

International Sales and Partnerships

DRB-HICOM Defence Technologies (DefTech) has pursued international partnerships primarily with Turkish and Chinese firms to enhance technology transfer, local manufacturing capabilities, and export potential for armoured vehicles and unmanned systems. A longstanding collaboration with Turkey's FNSS Savunma Sistemleri began in the early 2000s, focusing on the joint development and production of the AV8 Gempita 8x8 wheeled armoured vehicle family, which incorporates FNSS's PARS platform design adapted for Malaysian requirements. This partnership enabled DefTech to assemble vehicles at its facilities in Malaysia under a technology transfer agreement, supporting a 2011 contract for 257 units valued at approximately RM8.5 billion for the Malaysian Army, though primarily serving domestic needs. In July 2025, DefTech signed a strategic collaboration agreement with Turkish manufacturer Katmerciler at the IDEF exhibition in Istanbul for the joint production of the EREN 4x4 light tactical armoured vehicle. The deal, inked by DefTech CEO Mohammad Shanaz and Katmerciler CEO Mehmet Katmerci, emphasizes manufacturing in Malaysia with provisions for exports originating from the country, aiming to leverage DefTech's production infrastructure for third-party markets. This builds on DefTech's prior experience with Turkish partners and positions the firm to expand beyond domestic procurement into regional sales. DefTech has also ventured into unmanned systems through a May 2024 agreement with China's Sichuan AOSSCI Technology Co Ltd, targeting the co-development and supply of unmanned aerial vehicles (UAVs) via its DEFTECH Unmanned Systems division. The partnership focuses on integrating AOSSCI's technologies for potential military and dual-use applications, with an eye toward broadening DefTech's portfolio for international tenders. While DefTech has expressed interest in markets like Bangladesh—offering vehicles such as the HICOM Handalan logistics truck—no confirmed export contracts have materialized to date, reflecting a strategy reliant on alliances rather than standalone sales.

Operational Performance in Exercises and Conflicts

DRB-HICOM Defence Technologies' primary products, including the ACV-300 Adnan infantry fighting vehicle and AV8 Gempita wheeled armored vehicle, have been evaluated primarily through Malaysian Armed Forces (MAF) training exercises and firepower demonstrations rather than combat operations, reflecting Malaysia's absence from major armed conflicts since the company's inception. The Adnan IFV, locally assembled from Turkish FNSS designs and delivered starting in 2002, participated in the MAF Firepower Exercise 2023 at Asahan Camp, where it conducted live-fire maneuvers alongside other armored assets, demonstrating mobility and firepower integration without reported mechanical failures. In the Jungle Falcon Exercise Series 2/2025, a bilateral training event involving Malaysian and Thai forces, Adnan IFVs and AV8 Gempita vehicles successfully completed assigned missions, including simulated infantry support and reconnaissance tasks in jungle terrain, highlighting their adaptability to Malaysia's operational environment. The Gempita, inducted from 2016 onward with deliveries continuing into the 2020s, featured prominently in similar demonstrations, such as regional defense exercises emphasizing wheeled mobility and modular weapon systems, where it achieved speeds up to 100 km/h on roads and maintained amphibious capabilities. Support vehicles like the Handalan truck series have supported logistics in these exercises, contributing to sustained operational tempo, though specific performance metrics remain undocumented in public sources beyond general reliability claims by MAF units. No verified instances of DefTech products in active combat deployments exist, limiting empirical data on high-intensity performance; evaluations rely on controlled scenarios where vehicles met design specifications for protection, payload, and endurance. Ongoing service life extension programs for the Adnan, including proof-of-concept upgrades tested in field conditions as of 2024, aim to enhance longevity based on exercise feedback.

Controversies and Challenges

Corruption Investigations and Scandals

In May 2019, the Malaysian Anti-Corruption Commission (MACC) launched an investigation into DRB-HICOM Defence Technologies Sdn Bhd (DefTech) over allegations of graft in a RM17 million defense contract related to equipment supplies for armored combat vehicles, including the AV8 Gempita platform. Two senior executives—a 53-year-old chief executive officer holding the title 'Datuk' and a 45-year-old chief financial officer—were remanded by MACC for suspected receipt of bribes totaling hundreds of thousands of ringgit from multiple supplier companies involved in the procurement. The probe focused on irregularities in the awarding and execution of subcontracts for vehicle components, highlighting vulnerabilities in the defense supply chain where political and corporate connections can influence vendor selection. DRB-HICOM Berhad, DefTech's parent company, publicly confirmed the MACC's actions and stated its full cooperation with authorities, emphasizing that the matter pertained to individual conduct and did not implicate broader group operations. The disclosures led to an immediate market reaction, with DRB-HICOM shares declining by approximately 5% on the Bursa Malaysia following the news. MACC described the investigation as "aggressive," underscoring scrutiny of procurement practices in military vehicle programs amid Malaysia's history of defense sector graft cases. By March 2020, DefTech underwent a leadership change, with the implicated CEO replaced, signaling internal repercussions from the probe. No formal charges or convictions stemming from the 2019 investigation have been publicly reported as of the latest available data, though the case exemplifies systemic risks in opaque defense contracting environments where direct awards to politically linked firms like DefTech can foster opportunities for bribery. Critics, including transparency advocates, have noted that such incidents erode public trust in national self-reliance initiatives, as procurement secrecy often shields irregularities from independent oversight. DefTech has maintained that its core operations remain compliant with regulatory standards, with no evidence of wider institutional corruption beyond the remanded individuals.

Technical and Procurement Criticisms

The Auditor General's Report for 2025 identified multiple lapses in the Malaysian Army's armoured vehicle procurement contracts totaling RM7.8 billion, including those involving DRB-HICOM Defence Technologies (DefTech) products such as the AV8 Gempita wheeled armoured fighting vehicles. Key issues included significant delays in deliveries, with 68 Gempita vehicles supplied late between August 2020 and December 2023, resulting in penalties of RM162.75 million imposed on the supplier. Despite these delays and reported failures in meeting contractual specifications, full payments were disbursed without deductions for non-compliance in several cases. Procurement processes for DefTech's Gempita program, initiated under a 2010 contract for 257 vehicles valued at approximately RM1.6 billion, faced early production challenges that halted deliveries until resolved in late 2016. Although over half of the order was delivered by 2019 with completion targeted for 2020, subsequent audits revealed persistent supply chain and fulfillment shortcomings affecting operational readiness. The Defence Ministry acknowledged these delays in July 2025, attributing them to contractor performance issues spanning multiple vehicle types, including Gempita variants. Technical criticisms have centered on integration and reliability concerns arising from the modular design of DefTech vehicles, which rely on licensed Turkish FNSS Pars platforms adapted for Malaysian needs. While no widespread field failure reports have been publicly detailed, audit findings of "failures" in procurement deliverables suggest potential shortfalls in quality assurance, weapon system integration, or subsystem performance during acceptance testing. These issues have prompted calls for enhanced oversight in local defence manufacturing, highlighting risks of over-reliance on domestic assembly without sufficient independent verification of technical specifications.

Economic and Strategic Debates

The procurement of 257 AV8 Gempita wheeled armored vehicles from DRB-HICOM Defence Technologies (DefTech) for approximately RM7.2 billion has sparked significant economic debates regarding cost-effectiveness and opportunity costs within Malaysia's defense budget. Critics argue that the per-unit cost, estimated at around RM30 million, exceeds viable thresholds for a nation with competing priorities in naval and air capabilities, potentially diverting funds from more pressing strategic needs like maritime patrol assets amid South China Sea tensions. This high expenditure, characterized by some as inflated to facilitate technology transfer offsets, raises questions about the long-term economic viability of subsidizing domestic production through government contracts, especially as DefTech's performance challenges have dragged on parent company DRB-HICOM's overall financial outlook. Proponents counter that such investments yield multiplier economic effects, including thousands of jobs over the 13-year production span, upgrades to manufacturing facilities costing RM100 million, and involvement of over 100 local companies in co-production, fostering industrial depth and reducing import dependency. The AV8 program, developed in partnership with Turkey's FNSS, incorporates technology transfers for assembly, turret integration from South Africa's Denel, and progressive local content increases, positioning DefTech as a key player in Malaysia's pursuit of defense self-reliance. However, the Malaysian Army's decision to decline a proposed second batch of AV8s primarily on cost grounds underscores persistent fiscal constraints, highlighting debates over whether localized production justifies premiums over off-the-shelf alternatives. Strategically, DefTech's role embodies Malaysia's defense industrialization policy, initiated for both military autonomy and economic diversification, yet it faces scrutiny over reliance on foreign designs and components, limiting true indigenous innovation. While projects like the AV8 enhance logistics vehicle capabilities and support network-centric warfare research, skeptics question the strategic return amid opaque procurement processes and budget opaqueness in the sector. Broader industry analyses emphasize the need for sustainable competencies beyond government tenders, warning that without export successes or diversified civilian applications, firms like DefTech risk perpetuating a cycle of high-cost domestic favoritism over competitive global integration. This tension reflects causal trade-offs: short-term job creation and tech absorption versus long-term fiscal sustainability and strategic agility in a resource-constrained environment.

Strategic Impact

Contributions to Malaysian Defence Self-Reliance

DRB-HICOM Defence Technologies (Deftech) has advanced Malaysian defence self-reliance through local manufacturing of armoured vehicles, leveraging technology transfer agreements with foreign partners to assemble and integrate systems domestically. Under a 2011 contract valued at significant investment exceeding RM500 million in infrastructure and facilities, Deftech produced 257 AV8 Gempita 8x8 wheeled infantry fighting vehicles for the Royal Malaysian Army, including 46 IFV25 variants equipped with 25mm turrets manufactured locally in Nilai and integrated at a dedicated laboratory in Pekan. The first 12 IFV25 units were delivered on December 6, 2014, demonstrating operational readiness and local production capacity involving approximately 300 personnel. Similarly, Deftech contributed to self-reliance in tracked vehicles via the ACV-300 Adnan infantry fighting vehicle program, where it assembled portions of the 211-unit order locally following initial production in Turkey by partner FNSS. This collaboration enabled technology absorption, including upgrades and service life extension programs (SLEP) showcased in prototypes at events like DSA 2024, incorporating modern optics such as Spy Ball units to extend vehicle utility without full foreign dependency. These efforts have built domestic expertise in vehicle integration, reducing reliance on imports for spares and maintenance through in-house MRO facilities. Deftech's production of lighter vehicles, such as the Lipan Bara 4x4 armoured personnel carrier and Handalan 150-tonne logistics truck, further supports logistical autonomy for the Malaysian Armed Forces, with all manufacturing centered in Malaysia to foster industrial skills and supply chain localization. By prioritizing offsets in contracts—such as FNSS's technical assistance for AV8 production—Deftech has facilitated knowledge transfer, enabling incremental indigenous capabilities in design and overhaul, though full self-reliance remains constrained by dependence on licensed foreign designs. This positions Deftech as a cornerstone of Malaysia's defence industrialization, enhancing national security resilience via sustained local output and workforce development.

Technological Innovations and Industry Role

DRB-HICOM Defence Technologies (DefTech) has advanced Malaysian defense capabilities through localized design and production of armored vehicles, exemplified by the AV8 Gempita, an 8x8 multi-role wheeled platform indigenously developed with Turkish assistance and contracted in February 2011 for 257 units to equip the Malaysian Army. The AV8 incorporates modular architecture enabling variants such as infantry fighting vehicles, tank destroyers, and recovery vehicles, enhancing operational flexibility with amphibious capabilities and integrated weapon systems. In tracked vehicles, DefTech collaborates with Turkey's FNSS on upgrades to the ACV-300 Adnan infantry fighting vehicle, with a prototype unveiled at DSA 2024 featuring improved fire control and survivability enhancements derived from joint engineering efforts. Recent introductions include the Armoured Heavy Recovery Vehicle (AHRV), powered by a 520 horsepower engine for battlefield recovery, and the Armoured Engineer NBC Reconnaissance Vehicle (AENBCRV), both debuted in May 2024 to support logistics and specialized missions. These developments reflect DefTech's focus on integrating advanced propulsion, armor, and sensor technologies through technology transfer and in-house adaptation. DefTech's R&D extends to unmanned systems, including tactical unmanned aerial vehicles developed via university partnerships, such as with Universiti Tun Hussein Onn Malaysia in 2022 and Universiti Pertahanan Nasional Malaysia in May 2024, aiming to bolster indigenous capabilities in UAVs and automotive technologies. Earlier projects include successful completion of Sibmas AFSV 90 armored fighting vehicles and Volvo F88 gun towers, demonstrating sustained investment in prototype development since the 1990s. In the defense industry, DefTech serves as a cornerstone of Malaysia's self-reliance strategy, manufacturing vehicles like the 4x4 Lipan Bara and Handalan logistics trucks for the armed forces and security agencies, while expanding into systems integration and maintenance, repair, and overhaul services. By localizing production and fostering international collaborations, such as the July 2025 agreement with Turkey's Katmerciler for joint armored vehicle manufacturing, DefTech reduces import dependency and builds a sustainable domestic supply chain, positioning Malaysia as a regional hub for armored vehicle expertise.

Broader Geopolitical Implications

DRB-HICOM Defence Technologies' (Deftech) collaborations with Turkish firms, including a 2025 agreement with Katmerciler for joint production and export of the EREN 4x4 armored vehicle, exemplify Malaysia's pivot toward non-Western defense partners to achieve technology transfer and production localization. These ties build on earlier ventures, such as the 2011 FNSS partnership for the AV8 Gempita wheeled armored personnel carrier, which has integrated Turkish design elements into Malaysian forces. By facilitating co-development, Deftech aids Malaysia's strategic hedging in a multipolar environment, diminishing reliance on suppliers from established powers like the United States or Europe amid potential supply chain disruptions. Such partnerships extend Turkey's defense footprint into Southeast Asia, where Ankara pursues influence through affordable, combat-proven systems, as evidenced by FNSS and other platforms' deployments in regional exercises. This dynamic supports Malaysia's non-alignment doctrine, enabling interoperability with diverse partners while countering over-dependence on any single bloc, particularly relevant amid South China Sea territorial frictions. Deftech's role in these arrangements contributes to ASEAN-wide trends of diversified procurement, fostering intra-regional resilience against great-power coercion without escalating arms races. Geopolitically, Deftech's expansion into unmanned systems via pacts like the 2024 deal with China's Sichuan AOSSCI for drone technology underscores Malaysia's pragmatic engagement across ideological lines, prioritizing capability gaps over alliance rigidities. This approach bolsters deterrence in maritime domains critical to Malaysia's economy, where 80% of trade transits sea lanes vulnerable to disruption, while signaling to adversaries a capacity for sustained local sustainment. Collectively, these efforts position Malaysia's defense sector as a node in South-South cooperation, potentially influencing arms diffusion patterns and diluting the monopoly of traditional exporters in developing markets.

References

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