‘3RD NATIONAL CAR PLAN NOT VIABLE YET’
Strong partner with modern technology, design, production capabilities and solid financial support is needed, says analyst
MALAYSIA should not embark on a new national car project unless there is a strong partner with modern technology, design and production capabilities and solid financial support.
Sunway University Business School economics professor Dr Yeah Kim Leng said the idea would not be feasible, given the highly-globalised and competitive automotive industry.
“The trend is changing from internal combustion engines to hybrid and electric vehicles. The new technological trend favours players with deep pockets to undertake the shift,” he told NST Business yesterday.
Prime Minister Tun Dr Mahathir Mohamad yesterday floated the possibility of jointly starting a third national car project with other countries in the region.
Speaking at the 24th Nikkei Conference in Tokyo, said he Proton was no longer Malaysia’s national car as a substantial stake in the company was now owned by China’s Zhejiang Geely Holding Group.
Yeah said the plan to set up the third national car would only be feasible if Malaysia was able to produce a cheap, reliable and high-quality car to compete with existing domestic and international brands.
“The third national car should be able to compete not just based on prices but also on technology and features,” he added.
Yeah said the government was undertaking measures to reduce its RM1 trillion debt level and the local automotive market was too small to support another national car project, which could weigh down on the country’s finances.
“Malaysia has two national cars — Proton and Perodua — that are still in existence. The third national car will be competing in a small market.
“It will be highly-competitive, unless the company can target the regional car market like the Asean Economic Community,” he said, adding that the automotive market was competitive and deemed as “red-ocean” industry.
However, the benefits would be viable as long as there was no tariff protection or industry protection for the new car.
He said the third player should position itself in terms of changing the car trend by offering unique propositions and choices.
Yeah said the new administration should focus on improving the country’s investment environment and attractiveness, encouraging domestic and foreign direct investments in the country rather than embarking on another industrial project.
“If the government can provide incentives and support for a joint-venture by utilising the private sector, then it is fine, as long as the government’s money was not involved,” he said.
Yeah said a Japanese party could become a partner for Malaysia’s third national car project.
“Our ambition is to start another national car, perhaps in partnership with other countries in the region,” Dr Mahathir had said during a dialogue session at the conference.
He said Thailand and Japan were among countries in the region that had the expertise in manufacturing automobiles.