Mustapa admits Thailand trumped Malaysia in auto sector

By Lee Wei Lian, The Malaysian Insider

Minister of International Trade and Industry Datuk Mustapa Mohamed admitted today that the Thai auto industry had surpassed Malaysia’s despite entering the game at a later stage.

He also urged national carmaker Proton to find a strategic partner without which he said, it would find it “almost impossible” to survive in the global market.

“It is true that Thailand has done better and started later,” he replied at a press conference when asked to compare Malaysia to Thailand.

“We are mindful of that. I admit that they have done better. We would like to do better.”

Malaysia has a chance however to carve a niche for itself in the green auto industry following the announcement of several incentives for manufacturers of hybrid and electric vehicles and components in the National Automotive Policy (NAP) review announced by the Ministry of International Trade and Industry (MITI) today.

These include 100 per cent investment tax allowance or pioneer status for a period of ten years and a choice of either an exemption of 50 per cent on excise duty or a grant from the Industrial Adjustment Fund.

Mustapa added that incentives would also be extended to those who invest in the roll out of infrastructure needed to support the charging of electric vehicles and that the Ministry of Energy, Green Technology and Water would be drawing up a roadmap to develop the infrastructure for electric vehicles, which are seen as the wave of the future.

The country however, has to be aggressive in developing the green sector as other countries such as US, Japan, Australia, Singapore and even China are drawing up long term plans to become leaders in non-carbon emitting vehicles such as those powered by electricity or hydrogen.

The NAP review unveiled today is aimed at promoting Malaysia as an automotive hub but it faces an uphill battle.

MITI secretary general Tan Sri Abdul Rahman Mamat pointed out today that Malaysia is the world’s smallest producer of cars, and that by 2020, the number of global vehicle manufacturers would shrink from 15 to just ten.

Malaysia signalled its ambitions to be a player in the auto industry in the mid-1980s starting with the launch of Proton and later Perodua.

Since then however, the two marques have failed to make significant headway in the international market, and is glaringly absent from the world’s most sought after car market — US. It also has only a limited presence in the China market, which is on track to overtake the US as the world’s largest.

Meanwhile, protective measures aimed at making foreign cars more expensive meant that brands like Volkswagon, Honda and Toyota that are commonplace in other countries are out of reach for most ordinary Malaysians who have had to settle for local brands that often had their quality questioned.

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