CYBERJAYA: Having a larger automotive total industry volume (TIV) can help boost Malaysia's competitiveness and steer the country to become a regional manufacturing hub, said Malaysia Automotive Institute (MAI) chief executive officer Madani Sahari.
The MAI had projected that Malaysian TIV can hit one million units by 2020. This, said Madani, should be seen as an opportunity to boost the country's competitiveness in the global automotive arena.
“Having a TIV of one million is a great number but it's not fancy to declare we can reach that by 2020. So what? What does this mean to the public?
“One of the parameters to be competitive is the economies of scale. Having a TIV of one million (by 2020) will create economies of scale and this will help us to be more competitive among the global OEMs (original equipment manufacturers),” he told StarBiz in an interview.
The MAI is an agency under the International Trade and Industry Ministry that was established as the focal point and coordination centre for the development of the local automotive industry.
Madani said being more competitive would also mean being able to attract foreign direct investments (FDIs) from global OEMs and to be able to compete with neighbouring markets such as Thailand and Indonesia.
“Thailand and Indonesia are growing. There are private investors in these countries that will make sure the automotive industries in those countries continue to grow (and they will do it by) increasing their investments there.”
Madani noted that as Thailand was already an assembly hub within the region, Malaysia should aspire to become a manufacturing hub to remain competitive both on the regional and global scale.
“Thailand is already an assembly hub, they're not a manufacturing hub. Malaysia can aspire to be a real manufacturing hub.
“This would mean having automotive research and development capabilities, design and development capabilities, testing across all levels of vehicle component sub-systems, having better production and service capabilities and after-sales service.”
Madani said being a manufacturing hub (as opposed to an assembly hub) meant providing a full list of automotive-related services, ranging from design right up to after-sales.
“Having this ability will enable us to spur engineering capabilities in other sectors such as maritime, electronics, aerospace, plastics and rubber.
“Being a manufacturing hub, we will also be able to attract automotive investments into the country from global OEMs that have not set foot into this region.”
He said this could also help attract large OEMs from the United States and South Korea.
“They would like to come into a country where they can rely on its manufacturing capabilities. They (the OEMs) are not going to reinvest in a set-up that they already have in their own country.”