The Jaecoo J7 is still coming, but the delay in its arrival can be attributed to Jaecoo, and ultimately, Omoda and Chery Group (as a whole)’s plan to skirt import duties unfavorable to Chinese-made vehicles above a certain displacement. To do that, they’re switching sourcing from mainland China to Malaysia, a move that’s been confirmed by Chery Corporate Malaysia.

To recall, the Philippines slaps a 5 percent duty for Chinese-made vehicles with displacements below 1.5-liters and above 3.0-liters. Anything in between gets slapped with import duties of 30 percent. Meanwhile, thanks to the ASEAN Free Trade Agreement (AFTA), any vehicle assembled and imported from ASEAN neighbors, like Malaysia, gets a free pass.

With its turbocharged 1.6-liter engine, the Jaecoo J7 gets hit with massive import duties, if sourced from China. Even with their mega factory production scale, this could very well make the Jaecoo SUV uncompetitive, considering that Filipinos expect Chinese-made vehicles to be on the cheap side.

However, thanks to Chery’s Malaysian assembly plant in Shah Alam, Selangor, Jaecoo becomes the first brand under the group to benefit from zero import duties. Malaysia was chosen to become the Chery Group’s new ASEAN assembly hub.

And yes, the plant is designed to assemble both right- and left-hand drive vehicles. In fact, the carmaker has announced that Vietnam is its first left-hand drive market.

The first phase of exports from Malaysia to Vietnam will comprise Jaecoo Internal Combustion Engine (ICE) SUVs and Plug-in Hybrid Electric Vehicles (PHEV) with more models and brands to join the list. Exports to other countries within Southeast Asia will also follow including the Philippines, Thailand, Brunei, and Singapore.