After desolation period, automotive industry rejuvenated under new Federal Government
KUALA LUMPUR: The automotive sector has picked up its momentum after the May 9 General Election and the desolated industry, which has been lying quiet in the last couple of years, is rejuvenated with a renewed interest.
The election saw a change of government with the same man, who initiated the first national car project during his tenure as the fourth prime minister, making a comeback as the seventh prime minister, He is none other than Tun Dr Mahathir Mohamad.
First national carmaker Perusahaan Otomobil Nasional Bhd ( Proton) was founded in 1983 with the first Proton Saga model launched in July 1985, while the second national car maker Perusahaan Otomobil Kedua Sdn Bhd ( Perodua) was established in 1992 with its first model Perodua Kancil launched in August 1994.
Fresh from his appointment as the seventh prime minister, Dr Mahathir announced a plan to introduce the third national car project following the acquisition of a 49.9 per cent stake in Proton by Chinese automotive giant Zhejiang Geely Holding Group.
He asserted that the idea for the project was to reinvigorate the engineering capabilities of Malaysia that was facing a challenging time after Geely took over the engineering management of Proton as a result of the acquisition.
His idea, however, received mixed reaction from industry observers and players alike, with some voicing concern that the project could disrupt the market if the government were to instill a protectionism policy to help ensure success in the project.
Nevertheless, there is also a positive voice from the industry suggesting that the government looks at future technology for the project such electric vehicles compared to the traditional internal combustion engine.
Malaysia Automotive, Robotics and Internet of Things Institute ( MARii), formerly known as Malaysia Automotive Institute, the body that oversees the automotive sector in the country, came in support of Dr Mahathir, justifying why the third national car project was needed.
MARii chief executive officer Datuk Madani Sahari said the Malaysian automotive industry has already hit its peak and is starting to go down the ‘S- Curve’ technology life cycle.
“Therefore, a (new) national car project will gear Malaysia for the next phase, or a new S- curve for the industry,” he said in an article that was posted on the institute’s website.
He suggested that the project embodied the latest technologies in line with global trends surrounding digitalisation, artificial intelligence, nanoengineering, data science and other new areas, and discipline in the future.
As the project is to be driven by the private sector, Madani also called for participations from original equipment manufacturers, vendors and relevant stakeholders in the project.
According to the Ministry of International Trade and Industry that oversees the development of the automotive industry in Malaysia, the government has received 21 proposals on the development of the project.
Word has it that a Qatari investor is keen to invest up to RM1.6 trillion in the project which showed the huge interest in such endeavour.
Another outcome from the election which has positively impacted the automotive industry is the zero- rating of goods and services tax from June to August.
The announcement has a significant impact on vehicles sales which saw a jump of 50.1 per cent in June compared to May and continued to hover above 60,000 vehicles per month until August. — Bernama