Automotive sector on track to contribute 10pc to GDP by 2020

PETALING JAYA: The automotive sector is projected to more than double its contribution to the country’s gross domestic product (GDP) compared with four per cent last year, thanks to the reintroduction of the Sales and Services Tax (SST), said Entrepreneur Development Deputy Minister Dr Mohd Hatta Ramli.

He said the industry was on track to contribute 10 per cent to the GDP by 2020.

In 2016, the automotive sector contributed 3.6 per cent, or RM40 billion, to the GDP.

“The current four per cent contribution is not big, but it is significant. And now with lower car prices, we expect to see the number of vehicles sold to increase, which will further benefit the industry,” said Hatta at the launch of Malaysian Japanese Industrial Nurturing (MAJIN) programme by TOC Automotive College, here, yesterday.

He said at least five carmakers, namely Perodua, Honda, Toyota, BMW and Volkswagen, had reduced their prices by up to RM4,900, following the SST’s implementation.

Hatta said the development of the local automotive vendor ecosystem through human capital programmes and technology transfers would have a spillover effect on other high-value industries, such as aerospace, shipping, rail and green technology.

“This will ensure the competitiveness and sustainability of local vendors without being highly dependent on local original equipment manufacturers, such as Proton and Perodua.

“We expect private domestic demand and exports to rise due to the improving global trade.”

Hatta said Malaysia faced a shortage of skilled workers, and urged the younger generation to acquire practical skills, attitude, understanding and knowledge related to jobs in various economic sectors.

Meanwhile, the MAJIN programme aimed to produce automotive technicians with international expertise and experiences. Under the programme, students would undergo a twoyear placement in Japan after completing the 20-month course.