Malaysia’s National Automotive Policy (NAP) v 3.0POSTED BY Kaynis Chong ON 10 February 2020
Now that Malaysia’s National Automotive Policy (NAP) version 3.0 has been approved by the Cabinet and is ready for the official rollout by the Ministry of International Trade and Industry (MITI), it will be something like closing the stable door after the horses have bolted
One can’t blame the policymakers for the shelf life expiry because the document is already almost two years overdue and this final delay is because MITI wants Prime Minister Tun Dr Mahathir Mohamad to have the honour.
The NAP is supposed to make Malaysia a regional automotive hub. But it might not make a difference anymore because, in the Asean region, significant automotive investments are already bypassing Malaysia and going from Thailand directly to Indonesia.
About three years ago, Thailand launched its eco-car programme of incentives, effectively signalling that traditional internal combustion engine automotive industry investments were passe.
It was then anticipated that some of the car companies would channel their investments into Malaysia.
That hasn’t happened. Instead, Indonesia seems to have reaped the benefits.
In November, Hyundai announced a USD1.5 billion research and 150,000 car-a-year plants to be built in Bekasi, east of Jakarta, with production to start in late 2021.
In that same month, Indonesia’s Industry Minister, Agus Gumiwang Kartasasmita, came back from a visit to Japan with a broad smile on his face.
The trend is clear: together with Toyota Motor Group’s planned investment of about USD 2 billion from 2019 to 2023
and Honda Motor Company’s interest in investing Rp 5.1 trillion (approximately USD 5 billion) he had reason to be happy.
Indonesia is clearly overtaking Malaysia in the Asean automotive market.
“Malaysia’s automotive incentives are insufficient,’ says Datuk Dr Zahari Husin, former MD of Perodua Sales Sdn Bhd.
“Incentives shouldn’t be seen only in the monetary sense. It is more of attractions to investors.
“Now, the question is, why aren’t these investments coming to Malaysia which has the infrastructure and network of vendors. Why are they skipping Malaysia?
“Indonesia’s 350 million population and market demographics is one factor, but not the main factor,” said Zahari said when we met him last week.
Other industry participants are more forthcoming, who asked that their identities be kept confidential.
Their opinion is that Malaysia’s incentives should follow the Thailand model where investments, localisation, manpower resources are matched with a menu of incentives that are transparent for all to see on a website.
Indonesia, under its second-term President Joko “Jokowi” Widodo has also refreshed its charge at the automotive industry and taken aim at electrification. And its liberal policies for the automotive industry is getting traction.
Going further, traditional government polices taking a linear approach will be ripped apart by the sea change in the global automotive industry.
22 January 2020 was a landmark day in the world automotive industry. On that day, Tesla stock price (NYSE: TSLA) hit USD880 and made Elon Musk, the founder, and his company more valuable than Volkswagen AG, the world’s largest carmaker.
Tesla is iconic of battery electric vehicles (EVs), and since it launched its first BEV in 2008 and taking two years to deliver 20,000 units, its founder Elon Musk has proved to the world that EV’s are even more powerful and fun to drive than internal combustion engine (ICE) cars.
It will deliver 500,000 Tesla this year from its new Giga factories in Shanghai and Fremont, California. Another Giga factory in Berlin is planned. From a capability of 20,000 Battery Electric Vehicles (BEV) in two years to 500,000 BEV’s a year is a scale of change that the automotive world has never seen.
The novel Coronavirus 2019 has been forecast to dampen world trade since China accounts for 20 per cent of global manufacturing output.
Going back to our meeting with Zahari Husin, he confirmed that he had left Perodua Sales Sdn Bhd as its MD on 1 January 2020 after overseeing a period of record sales, including the all-time high of 240,341 units and a 40 per cent market share last year.
He’s now the Pro-tem President of Consultant Business Management and Research Association (CBMRA), a new NGO to be launched in March.
“I’m going to take a break for a while and will consider going back to the automotive industry, but I will definitely contribute through my writings and talks.”