Malaysia seeks foreign investors for 3rd car project

25, Feb. 2020

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By Charlotte Chong

KUALA LUMPUR, NNA - Malaysia is looking for foreign investors for its third national car project which it hopes would help transform its automotive industry into a great powerhouse under the new National Automotive Policy 2020 (NAP).

Launched last Friday by Prime Minister Mahathir Mohamad, the policy maps out strategies and measures to further develop the sector, targeting its contribution to the country’s gross domestic product to go up from the current 4 percent to 10 percent by 2030.

When asked if Malaysia would collaborate with Japanese automakers for the project, Mahathir replied, “We started with Japanese (for Proton), we are very grateful for that, but the fact is that we find advances are not only made in Japan but also in other countries, including China, Korea and also some Europeans countries.”

He welcomed collaboration with any partner if it offers unique technologies that fit into its first prototype, which is not unveiled to the public yet.

“We have the capacity but we need investments,” said Mahathir, whose government suddenly collapsed on Monday after a faction pulled out causing the ruling coalition to lose its majority. Mahathir resigned but was re-instated as interim PM by the Malaysian King.

Mahathir, who has been championing for the new car project, said last Friday that the government needs to analyze the market properly before offering business incentives.

“We need to know what the public wants and to understand the new technologies. We have the capacity but we haven’t reached the stage where we can actually invest,” he said during a press conference at the Ministry of International Trade and Industry (MITI).

Under the new policy, the Malaysia Automotive Robotics and IoT Institute (MARii) will implement stringent cost-benefit analysis (CBA) on foreign carmakers, before proposing customized incentives to the government.

“There is no more like you can bypass this system and ask for incentives. They will not work now. Everything has to go through proper evaluation now,” MARii chief executive officer Datuk Madani Sahari told reporters last Friday.

The Automotive Business Development Committee (ABDC) chaired by the industry ministry will do evaluations before sending proposals to the Ministry of Finance for consideration.

For instance, if an original equipment manufacturer (OEM) decides to start a car-rental service in Malaysia, the business should be considered for cost benefit analysis as it would provide job opportunities to Malaysians.

The assessment would cover all the positive effects a business could bring to the Malaysian economy, he added.

Such comprehensiveness is reflective of the holistic approach taken in the long-awaited NAP 2020 which is a vast revision and update of the 2014 policy.

It will focus on research of new technologies, creation of business and jobs opportunities particularly for small medium enterprises and the development of new manufacturing processes and value chains within the local automotive as well as the overall mobility sector.

In his keynote address, Mahathir said the adoption of green technology for Energy Efficient Vehicle (EEV) and the Next Generation Vehicle (NxGV) will need to be supported by the right ecosystem and infrastructure.

The government aims to set up an industrial zone for circular economy business practices within the next 12 months. Facilities for end-of-life cycle battery cells and waste management and treatment will be improved, not only for the automotive industry, but also for related industries.

Datuk Madani Sahari said a 100-acre plot of land has been designated for this industrial zone for remanufacturing, recycling, testing and auctioning of used cars.

“In Malaysia now, we don’t have the capacity to recycle batteries…You need a proper zone, proper SOP (standard operating practices) and logistics.”

In support of green technology, he said palm biodiesel for vehicles will be upgraded to B30 standard, he said, adding that it will be tested at the national emission test center before introduction.