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Why don’t you fix the Malaysian auto sector?

POSTED BY Kaynis Chong ON 10 November 2020
Malaysian Auto Sunset

Dear PM Muhyiddin,

Why don’t you fix the Malaysian auto sector first? It can create a lot more high-value jobs for Malaysians.

It’s a low hanging fruit and quite visible judging from the successes in Thailand, Indonesia and now, Vietnam.

You need to ask your economic team if they can do better in the context of:

1. Thailand exports pick-up trucks to the world except to the Americas. That’s a lot of employment for the Thai people and a lot of business for the Thai component industry.

2. Theoretically, it shouldn’t be difficult for Malaysia to emulate Thailand’s success. The difficulty lies in dismantling the structures and nationalistic attitudes that are contrary to the realities of the world auto industry.

3. So what are these realities?

4. The first reality is the Ownership of Technology. When the industrial world is racing a low-carbon automotive and transport sector, where is Malaysia if it doesn’t review its Mahathirian demands that foreign automotive companies investing in Malaysia must offer a specific percentage to preferred Malaysians?

5. Why would a tech company like Tesla, the Electric Vehicle (EV) maker want to share its technology, if it can’t own all of its company? Even China had to change its foreign investment laws to seal Tesla’s investment in Tesla Giga Shanghai.

6. On that note, I would see that Malaysia can create more high-value employment in the automotive segment if it liberalises foreign investment policies.

7. That first big step is easy enough: invite Zhejiang Geely group to own a controlling majority of the manufacturing of cars in JV with Proton. The Perodua business model of cooperation with Toyota group is a good example.

8. Imagine, a Zhejiang-Geely Group-owned Proton Auto Manufacturing(PAM) manufacturing and exporting to Asean countries.

9. And why not? As long as the ASEAN trading bloc stands, Malaysia will benefit from exporting Proton cars as ASEAN CBU’s.

10. And this liberalisation will benefit the other car companies in Malaysia which already export cars regionally – Bermaz Auto and Volvo Cars Malaysia.

11. Think of the increased employment for Malaysians which have affected by the structural collapse of the aviation and hospitality industries.

12. Isn’t this pandemic the time when we must seize the opportunity to unite and achieve former PM Tun M’s vision of creating high-valued employment for Malaysians in a globally-competitive automotive sector?

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