Malaysia aims to boost car export market

NAP2020 incorporates 3 new advanced technological elements — NxGV, MaaS and the IR4.0, say PM


MALAYSIA wants to expand the local car industry into a key export segment while embracing future mobility under the National Automotive Policy 2020 (NAP2020).

NAP2020, which formed the building blocks of the country’s automotive sector, was unveiled by Prime Minister (PM) Tun Dr Mahathir Mohamad last Friday.

Dr Mahathir said the NAP2020 incorporates three new advanced technological elements — next-generation vehicle (NxGV), mobility-as-a-service (MaaS) and the Industrial Revolution 4.0 (IR4.0).

He said the new automotive master plan will cater for the different needs and expectations of various stakeholders within the value chain.

“NAP2020 has considered all possible elements in the areas of research and development, participation of domestic companies in the local and global supply chain, engineering activities, capability and capacity building of local talent and enhancement of exports as well as investment incentives,” Dr Mahathir said at the launch of the policy in Kuala Lumpur.

The NAP2020 will become the guiding principle of the industry between 2020 and 2030.

It wants to grow the total industry volume (TIV) to 1.22 million units by 2030; total production volume (TPV) to 1.47 million units; motor vehicle export value to RM12.3 billion; parts and components exports to RM28.3 billion and remanufactured parts and components exports to RM10 billion.

The automotive sector’s contribution to the economy would rise to RM104.2 billion by 2030, or 10% of the country’s GDP.

One industry player told The Malaysian Reserve that the NAP2020 is “very ambitious” and the prospect of achieving 1.22 million TIV in the next 10 years would raise eyebrows.

Malaysia’s TIV currently stands at about 600,000 units a year with hardly single-digit growth.

Malaysia Automotive, Robotics and Internet of Things Institute CEO Datuk Madani Sahari said the TIV projection was made based on compounded GDP annual growth rate.

Madani said the industry shall look beyond TIV numbers as the NAP2020 gives attention to exports.

“TIV is about domestic sales. What is more important is the TPV because that includes car exports. We calculate the TIV based on compounded GDP annual growth year-on-year and other variables with hypotheses.

“If we don’t achieve certain things, that is because we did not meet the hypotheses in some years,” he said.

The Malaysian Automotive Association president Datuk Aishah Ahmad said the NAP2020 places more emphasis on exports and supply chain development.

Perusahaan Otomobil Kedua Sdn Bhd (Perodua) president and CEO Datuk Zainal Abidin Ahmad said the NAP2020 continues to support component localisation.

He said Perodua purchased a total of RM43.5 billion worth of components from local suppliers including RM5.4 billion last year.

The carmaker is expected to spend nearly RM6 billion on locally sourced automotive components this year.

UMW Toyota Motor Sdn Bhd president K Ravindran said the NAP2020 provides direction and guidance that is of great value to forward planning, particularly in investments in Malaysia.

“UMW Toyota is keen to be supportive in line with the NAP2020 objectives when specifications and expectations are clear. It is also hoped that the government will continue to give incentives for a sufficient length of time.

“This will help to justify investments and provide reasonable returns on investment,” Ravindran said in a statement last Friday.

Premium carmaker MercedesBenz Malaysia Sdn Bhd (MBM) said the NAP2020 is a positive enhancement to the NAP2014 as it aims to make Malaysia a regional automotive leader.

“The development and production of energy-efficient vehicles and NxGV with increased levels of automation are an explicit encouragement by the government on future mobility in Malaysia and we see the NAP benefitting all players in the automotive industry,” MBM president and CEO Dr Claus Weidner said in a statement last Friday.