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Malaysia’s third national car — POEM

POSTED BY Yamin Vong ON 31 July 2018

 

Malaysia’s Third National Car to be driven by industrial policy or environment policy?

Dear Tun Dr Mahathir Mohamad,

Regarding your answers at the Parliament Q&A on Monday, you described your unhappiness at the fate of Proton and you shared your thoughts on having a Third National Car. The debate is now roiling in print and social media, including the influential MY EV and PHEV Whatsapp group.

When you gave us your vision of the national car in 1983, there was a one-sided debate because you bulldozed the way through holding up your flag of national pride.

But now, 34 years after Proton rolled out to the Malaysian public, there are four lessons going forward to the third national car that my colleague Hezeri Samsuri has named Perusahaan Otomobil Elektrik Malaysia (POEM)

  1. The theory about economies of scale being an absolute factor in the automotive industry is clearly indicated by Proton’s diminishing market share. Proton is a small producer compared to Honda and Toyota by a big scale.

 

When Proton buys one million electric window winder for the Persona, Toyota will order 20 million electric window winder for its Vios. Who gets the cheaper price and better quality? Of course, Toyota and likewise, Honda.

 

So, for POEM to succeed, it must concentrate on economies of scale; buy off-the-shelf electric motors, battery controllers and all the other standard plug-and-play stuff from Continental, Delphi, Bosch, Nippon-Denso. Next, it must find a foreign partner that is a global technology leader in the field of electric vehicle components, EV’s and/or autonomous driving. And this global leader must also share Malaysia’s ambition to capture this new market segment for emission-compliant electric vehicles in Asean first. EV is a disruptive technology and who knows what form a technology partner might take.

 

  1. Malaysia must not only be open to foreign automotive investors, if there are any subsidies or privileges, these should be disbursed across the board. Don’t pick champions. EV and charging standards must be compliant with China because itis the largest EV maker in the world.
  2. You must decide whether our automotive industry is about being environment driven and reducing emissions or whether it’s strictly about creating jobs in automotive plants. Since we’ve already lost the war for manufacturing jobs to Thailand’s automotive industry which is a global hub for pick-up trucks, let’s change the game. Go for sustainable mobility; for an automotive industry that’s based on emission standards, a dense network of high-power supercharging electrical points. Plenty of jobs creation in the building industry.

Make it a national mission to make Malaysia’s national fleet average fuel consumption to 100g/kilometer in 10 years.

On this point, Malaysian think tank, IDEAS, wants the government to have a clear mind on automotive policy.

“Technical standards on imports to ensure passenger safety are OK but other barriers to trade including taxes and duties designed to protect Malaysia’s domestic industry should be avoided,” it said

The new government should set up a joint commission of the three ministries — environment, trade and industry, finance —  to enable this POEM and sustainability mobility. Charging points to be mandatory at places of work and strata residences.

  1. We’ve learnt from our experience with Perodua that seeking majority Malaysian equity in POEM will be counter-productive. This is an important lesson how patriotism is best served by being willing to learn from a foreign technology partner. Perhaps later, another Malaysian individual will make an EV or battery breakthrough and then Malaysia will be technology rich nation as you, our leader, envisions.

Dear Tun, taking the lessons learnt with Proton, this time, we should be more successful in the automotive industry and create a lot of high tech jobs and programming using environment policies and drawing on partnerships to get economies of scale.

Perhaps we should ask if people would buy an electric car, given the chance?