Transportation Technology – Automotive

The Malaysian automotive industry is an important and strategic part of our manufacturing sector. The industry encompasses the production of motor vehicles including passenger vehicles, commercial vehicles, motorcycles and scooters, as well as automotive parts and components. The automotive sub-sector is part of a complete ecosystem that covers the primary, manufacturing, supporting services, and after-sales sectors.

The industry has boosted the development of engineering, auxiliary and supporting industries. It has also contributed to skills development and the upgrading of technological and engineering capabilities. These factors have further enhanced the attractiveness of Malaysia as a base for global automotive manufacturers.

Malaysia ranks favourably among ASEAN countries for high car ownership ratio in the region. Honda, Toyota, Nissan, Mercedes-Benz and BMW are some of the global automotive companies which have set up their operations in Malaysia to take advantage of the buoyant consumer demand.

The development of Malaysia’s automotive industry has made the country a production centre for major automotive component manufacturers. Today, there are about 800 automotive component manufacturers, producing a wide range of components, such as body panels, brake parts, engine parts, transmission and steering parts, rubber parts and E&E parts.

Moving forward, digitisation and new business models will continue to revolutionise the world and there will be no exception for the automotive industry in Malaysia. It is expected that technology-driven trends such as diverse mobility, autonomous driving, electrification and connectivity will shape the industry in 10 to 15 years’. Although the future of the automotive industry presents many challenges, it also provides many new opportunities.

Taking into consideration the latest trend in the automotive industry within ASEAN, the sustainability in economic growth, infrastructure developments and automotive original equipment manufacturers’ (OEMs’) continuous introduction of models are giving a huge boost to the automotive industry. The ASEAN automotive industry benefits significantly from governments’ continued promotion of infrastructure development through investments.

The National Automotive Policy (NAP) 2020 continues to develop the domestic automotive sector and its whole ecosystem in order to realise the National Automotive Vision. The review includes three new elements: Next-Generation Vehicle (NxGV) such as electric and hybrid vehicles, Mobility as a Service (MaaS) & Industry 4.0.

Given the objective to enhance Malaysia’s automotive industry in the era of digital industrial transformation, investors should take note of specific incentives related to its proposed measures that are applicable to the relevant projects.