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Revving up Malaysia's automotive sector [30-05-2013]  
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THE revised National Automotive Policy (NAP) will boost the local automotive industry by drawing more investments into the country, industry executives said.

Malaysia Automotive Institute (MAI) chief executive officer Madani Sahari said more foreign players are expected to invest in the local industry as it becomes more liberalised.

The government is positioning Malaysia as the regional energy efficient vehicles (EEV) hub via the revised NAP.

“The policy will open up and liberalise our automotive industry. It will allow the industry to expand and bring in new investments,” Madani said.

He was speaking at the second series of the Business Times Insight focusing on the NAP, here, yesterday.

Bermaz Motor Sdn Bhd managing director Datuk Ben Yeoh, Volkswagen Group Malaysia Sdn Bhd managing director Dr Zeno
Kerschbaumer and AAPICO Hitech Public Co Ltd president and chief executive officer Yeap Swee Chuan were the panelists. Also present were the New Straits Times Press (M) Bhd chief executive officer Mohammad Azlan Abdullah and Business Times managing
editor Mustapha Kamil Mohd Janor.

Yeoh said the revised NAP should have the strength to entice foreign investments with high technical expertise and technology to Malaysia.

"We need foreign participation as we do not have the technology here to develop on our own," he added.

Madani said the NAP will raise Malaysia to be on par with other Asean economies, as it will emphasise more on the development of the EEV sub-sector.

There will be many incentives for EEVs in the policy, which will be announced "sooner rather than later".

Madani said the revised NAP must be unveiled as soon as possible for Malaysians and the automotive industry to get a clearer picture of what the government has for the sector.

He said under the 10th Malaysia Plan (2011-2015), one of the aims was to improve air quality by reducing emissions, and this will change the local automotive landscape in the near term.

Madani said the policy will also focus on increasing the local contents and level of international collaboration to develop technology and human capital.

"There would be fresh strategic investments by new original equipment manufacturers (OEMs), coupled with the expansion of existing OEMs that have a major presence in Malaysia," he added.

Vendors and players in the supply chain may move into a consolidation phase as they search for higher economies of scale to match the onslaught of the new and expanding OEMs in the country, Madani said.

By 2020, the Asean total industry volume (TIV) is expected to hit 5.5 million units, compared with the existing capacity of 3.5 million.

"There is room for the additional capacity to be created in the region," he said, nothing that the OEMs will be looking at suitable spots in the Asean region to invest.

Madani expects the gross domestic product (GDP) contribution from the automotive sector to increase to 3.4 per cent this year from 3.2 per cent in 2012, before rising further to 10 per cent by 2020.

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