What's the future of Malaysian automotive? - MIDA | Malaysian Investment Development Authority
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What’s the future of Malaysian automotive?

What’s the future of Malaysian automotive?

13 Mar 2024

The future of Malaysia’s automotive sector lies in the manufacturing and production of high tech components given our rising labour cost.

Automotive specialist Hezeri Samsuri said Malaysia should focus on becoming a producer instead of just an assembler as most cars today are equipped with high tech components. 

“I would say the future for Malaysia is in the manufacturing and production of high tech components due to our increasing labour cost. 

“Cars nowadays are littered with computers and high tech components and it is high time that Malaysia become a producer, and not just an assembler,” he told Business Times.

“Take a lesson from Taiwan. They started like us but where are they now and where is Malaysia?” he asked.

Commenting on the rising operational cost faced by auto parts vendors affiliated with Proton Holdings Bhd, he said many are bound to close down should the situation worsen. 

“In the world of manufacturing, we can run away from cost cutting measures. 

“Many automotive vendors do not depend on one manufacturer alone. There are many reasons why a company has to wind down and this require some investigation,” he said. 

He added that majority of sales in the local automotive industry come from completely knocked down (CKD) vehicles. 

To maintain the CKD status and to enjoy its benefits, Hezeri said car company must maintain a certain number of local components. 

“This is being practiced in many countries and the best is a vendor should not focus on one client only.

“Having said that, Investment, Trade and Industry Ministry should help companies who want to come up with their own technology by introducing it to the global market. 

“We can start by exporting high tech components with better technology.”

He added that the transition from internal combustion engine to electric vehicle (EV) is a good start.

“But we should be more focused. For example, in the next 10 years, we want EVs assembled in Malaysia to use critical EV components made here. 

“They can either be the electric motor, or the Battery Management System, or any other high tech component that an EV requires,” he said.

Source: Bernama