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Auto industry in Malaysia

Automotive in Malaysia is a booming industry and considered as one of the most important industry that contributes to manufacturing sector. As one of the leading producers and exporters of vehicle parts, the accessories produced are imported to a number of countries. Even Malaysian-made cars such as Perodua and Proton are available in Japan, Thailand, Singapore, Indonesia, Taiwan and United Kingdom.

The automotive industry in the country began in 1960s. Government designed new policies in 1960s and supported the idea to establish own automotive industry. The new policies encouraged local companies to take part in assembly for automobiles and manufacture of component parts and accessories.

Several new policies were implemented later to help boost the industry. That includes the requirement to have parts of the vehicle to be manufactured locally and tariff system on CBU imports. Following the introduction of the policies, six assembly plants were launched in 1967. In the same year, Swedish Motor Assemblies Sdn Bhd opened a branch office in the country.

Today, leading automotive manufacturing companies such as Ford, General Motors, Nissan, Suzuki, Mercedes and Mazda are using Malaysian made accessories and components due to its good quality at competitive prices.

According to a survey conducted by Business Times in 2007, the sales for Malaysian vehicles reached 4,648 units. The statistics indicated a growth of 13.8 percent from previous year and analysts predict an increase in the next few years. In early 2009, the global financial crisis caused slowdown in the industry. Nevertheless, government made some crucial decisions by taking control of the inflation and set the costs down.

The latest Malaysia Budget 2010 has revised the National Automotive Policy (NAP). Changes in NAP is meant to facilitate business opportunity, address bumiputera privilege, protection and other relevant policies to attract more foreign investors to spur automobile industry in the country.

Among some of the more notable reviews are the import of used components and the introduction of vehicle end of life policy. Based on the revised NAP, all second-hand components and reconditioned are prohibited from importation into the country by June 2011. This is meant to help local parts vendors to gain more sales locally.

Meanwhile, the gradual introduction of vehicle end of life policy is to have vehicles above 15 years to be inspected when renewing road tax to ensure road safety. The policy introduced is in line with government’s effort to reduce carbon dioxide emission and pollution.

The country has two leading automakers – Proton and Perodua. Perusahaan Automobil Nasional (Proton) was established in 1984. A joint venture programme with Mitsubishi Motors Corporation of Japan, Proton project managed to launch Proton Saga model in 1985. Proton has introduced several other prominent models such as Proton Waja, Proton Gen-2, Proton Wira, Proton Perdana and the first local MPV – Proton Exora.

Since the first national car gained acceptance from not only locals but also foreigners, Perusahaan Otomobil Kedua Sdn Bhd (PERODUA) began its operation in October 1992. This time around, Perodua is a joint venture project with UMW Corporation Sdn Bhd, Daihatsu Motor Co Ltd of Japan, Med-Bumikar Mara Sdn Bhd, PNB Equity Resources Corporation Sdn Bhd, Mitsui & Co Ltd of Japan and Daihatsu (Malaysia) Sdn Bhd. Over the years, Perodua has launched a series of models such as Kancil, Rusa, Kembara, Kenari, Kelisa, MyVi, Viva, Nautica and Alza.