Local carmakers shifting to top gear for smoother drive
KUALA LUMPUR: Malaysia’s car industry is set for a smoother drive with both national carmakers, Proton Holdings Bhd and Perusahaan Otomobil Kedua Sdn Bhd (Perodua), shifting to top gear to become more robust and competitive.
Proton’s alliance with China’s Zhejiang Geely Holding Group Co Ltd should be able to address the structural issues faced for so long — small market, lack of economies of scale and costly research and development (R&D). Perodua, on the converse, is moving up the value chain in the industry based on its ability to compete globally.
Bernama delved deeper into the progress made by the carmakers in a recent interview with International Trade and Industry Minister Datuk Seri Mustapa Mohamed. Proton was now able to access existing markets of the Chinese carmaker as well as the right-hand drive segment in Southeast Asia, said Mustapa.
“The partnership will allow Proton to tap into Geely’s technology and R&D facilities, including a range of platforms and power trains. More importantly, it could fully realise the potentials of its production plants,” he said.
Mustapa said Proton could turn around and be a competitive global player with all of these issues addressed.
There are concerns on the impact on local vendors, especially once the business restructuring takes place. Proton has about 240 vendors, with almost 50,000 employees in its direct supply chain.
“DRB-HICOM has given an assurance that in selecting Geely, it had taken into account all such issues. While local vendors are still expected to meet stringent quality, cost and delivery measures to ensure the competitiveness of Proton, they are also open to other opportunities created from the partnership.
“These include technical cooperation to enhance capabilities, possible participation in Geely’s supply chain and being able to export regionally,” said Mustapa.
On whether the local car industry was considered to be liberalised with the tie-up, he said, the industry was already fairly open and liberalised under the National Automotive Policy 2014.
“The government has allowed for issuance of new manufacturing licence for motor vehicles in the category of energy-efficient vehicles across all segments without engine capacity restriction.
“In addition, there is no equity limit for foreign investors/companies to participate in manufacturing activities in the car sector. Thus, there is no issue of liberalisation of the car industry to be linked with the tie-up.”
As for Perodua, Mustapa said, the second national carmaker was currently doing very well with domestic sales of 207,110 units last year with 35 per cent share of the overall total industry volume, putting Perodua as market leader in the local motor vehicle industry.