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Market Watch 2012
The Malaysian Automotive and Supplier Industry
General information about Malaysia
Malaysia is centrally located within the Association of South-East Asian Nations (ASEAN).
Consisting of two regions separated by the South China Sea the Malaysian Peninsula and the
states of Sabah and Sarawak on the island of Borneo Malaysia is a federation of 13 states and
three federal territories. The former British colony gained its independence in 1957. SinceIndependence, Malaysia has adopted the political system of a parliamentary democracy with a
constitutional monarch whose position is rotated every five years between each of the nine
hereditary state rulers. The political scene has been characterized by an extra-ordinary degree of
political stability and continuity through an encompassing national coalition of political parties.
Its territory comprises approx. 330,000 sq km, four fifths of which are covered by tropical
rainforest. Due to its bio-diverse range of flora and fauna offering excellent beaches and brilliant
scenery, the country is one of the regions key touristic destinations. Malaysia is a mult i-ethnic,
multicultural and multilingual society with 28.66 million members. Ethnic Malays make up the
majority of the population at 57.1% followed by Chinese at 24.6%, Indian at 7.3% and other local
ethnicities at 11%. The Malaysian constitution guarantees freedom of religion, although Islam is
the largest and official religion. Approx. 61.3% of the population practice Islam, 19.8% Buddhism,
9.2% Christianity, 6.3% Hinduism, and 2.6% practice Confucianism and other traditional Chinese
religions. The official language of Malaysia is Bahasa Malaysia, but English as well as Chinese are
the business languages.
Economical Overview
Malaysia is a dynamic country which is constantly evolving. Being a middle-income country,
Malaysia has transformed itself since the 1970s from a producer of raw materials into an
emerging multi-sector economy spurred on by high technology, knowledge-based and capital-
intensive industries. Malaysias Economic Performance ranking improved to 7th place out of 59
economies this year compared with 12th position in 2007.1 It is one of the 20 largest trading
nations worldwide and was headed of Taiwan, Sweden, Canada, Australia, the United Kingdom
1Malaysias economy attains 7thposition, New Straits Times, 20th May 2011.
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and Switzerland.2 The World Competitiveness Yearbook 2011 Report released by the Institute for
Management Development (IMD) continued to rank Malaysia as among the top 5 most competitive
nations in the Asia-Pacific region, taking 6th position in the 20 million population category and 2nd
position after Taiwan in the GDP per capita less than US$20,000 category.3 Moreover, the country
is the 21th largest exporter among all trading nations worldwide.
Strategically located in the heart of South-East Asia, Malaysia offers a cost-competitive location
for investors intending to set up offshore operations in order to manufacture advancedtechnological products for both regional and international markets. In addition, Malaysia has a
market-oriented economy which is supported by pro-business government policies. Last year, the
Malaysian Government launched the Economic Transformation Programme (ETP) which is
managed by PEMANDU (Performance Management & Delivery Unit) under the patronage of the
Prime Minister.4The ETP identifies 12 National Key Economic Areas (NKEAs) which are drivers of
economic activities that have the potential to materially contribute to the growth of Malaysia. Its
objective also known as Vision 2020 is to transform Malaysia into a high income country
by year 2020. The programme will lift Malaysias Gross National Income (GNI) to US$523 billion by
2020, and raise per capita income from US$6,700 to at least US$15,000, meeting the World Bank's
threshold for high income nation.5 To achieve the targets set, Malaysia needs an annual growth of
GNI of 6%. There are plans to revitalize Malaysia's private sector, to grow the service sector from
58 to 65% and to create 3.3 million new jobs.6 The Government will also introduce other
transformation plans in 2012.7
In Malaysia, the 2011 GDP growth edged lower to 4.0 percent year-on-year due to a weaker
domestic demand. Further implementation of ETP projects and a RM232.8 billion 2012 Budget
tabled by Prime Minister Datuk Seri Najib Razak will boost domestic demand, but unlikely to
offset underperformance in net exports8.
2 Ibid.3 Ibid.4 Seewww.pemandu.gov.my.5 Forbes.com, 21st September 2011.6 Ibid.7Malaysia Budget 2012 Main Highlights,www.financesentral.comaccessed on 21st November 2011.8 Malaysian Economic outlook by Malaysian Institute of Economic Research (MIER),www.mier.org.my/outlook21.11.
http://www.pemandu.gov.my/http://www.pemandu.gov.my/http://www.pemandu.gov.my/http://www.financesentral.com/http://www.financesentral.com/http://www.financesentral.com/http://www.mier.org.my/outlookhttp://www.mier.org.my/outlookhttp://www.mier.org.my/outlookhttp://www.mier.org.my/outlookhttp://www.financesentral.com/http://www.pemandu.gov.my/ -
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Economical Key facts Malaysia9
Currency: 1 Ringgit (RM) = 100 Sen
Exchange rates: 1 EURO = RM4.3; 1 US$ = RM3.2 (17.11.2011)
GDP (billion RM): 2009: 679.94; 2010:765.97; 2011: 829.34
GDP - real growth rate: 2010: 7.2%; 2011: 4.0%, 2012: 5.0% (est.)10
Inflation rate: 3.3-3.5 % (est. 2012 IMF)
Exports: RM513.59 billion (Jan- Sep 2011)
Exports - commodities: Electronics 34.5%; petroleum & products 9.9%; palm oil
9.3%; chemical products 6.9%; machinery 3,4%; manufactures
of metal 3.0%; rubber products 2.6%
Exports partners: Singapore 13.3%, China 12.5%, Japan 10.5%, USA 9.5%,
Thailand 5.3%, Hong Kong 5.1%, Germany: 2.7%
Imports: RM424.37billion (Jan Sep 2011)
Imports - commodities: Electronics 31.2%, petroleum & products 10.1%, chemical
products 9.2%, machinery 8.0%, manufactures of metal 5.9%,
transport equipment 5.1%, iron & steel products 4.3%, optical
& scientific equipment 3.2%, processed food 2.2%, other
products 20.8%
Imports - partners: Japan 12.6%, China 12.6%, Singapore 11.4%, USA 10.6%,
Thailand 6.2%, Germany 4.0%
Unemployment rate: 3.0% (2011)11
Average wage 2011: Project manager IT: RM8,415, lecturer/speaker: RM3,459,
mechanical engineer: RM3,070, account executive: RM2,572,plantation worker: RM85012
Population below poverty line: 3,6%13
9 Malaysia External Trade Development Corporation (MATRADE),www.matrade.com.my.10 Malaysian Institute of Economic Research (MIER),www.mier.org/outlook/ accessed on18th November 2011.11 Bank Negara Malaysia, Economic and Financial Data for Malaysia, last updated on 14th November 2011.12www.payscale.com/research/MY/Conutry=Malaysia/Salaryaccessed on 21th November 2011.13Index Mundi,www.indexmundi.com/g?r.aspx?v=69accessed on 18th November 2011.
http://www.matrade.com.my/http://www.matrade.com.my/http://www.matrade.com.my/http://www.mier.org/outlook/http://www.mier.org/outlook/http://www.mier.org/outlook/http://www.payscale.com/research/MY/Conutry=Malaysia/Salaryhttp://www.payscale.com/research/MY/Conutry=Malaysia/Salaryhttp://www.payscale.com/research/MY/Conutry=Malaysia/Salaryhttp://www.indexmundi.com/g?r.aspx?v=69http://www.indexmundi.com/g?r.aspx?v=69http://www.indexmundi.com/g?r.aspx?v=69http://www.indexmundi.com/g?r.aspx?v=69http://www.payscale.com/research/MY/Conutry=Malaysia/Salaryhttp://www.mier.org/outlook/http://www.matrade.com.my/ -
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Bilateral Trade: Malaysia & Germany
Malaysia is EUs second largest trading partner inside ASEAN, behind Singapore, with bilateral
trade in goods reaching 31.9 billion Euros in 2010 and the EUs 22nd largest trading partner.
Germany enjoys intensive trade relations with Malaysia and is one of the main foreign investors in
Malaysia, while among members of the European Union, Germany is Malaysias leading trade
partner.14 Besides, Malaysia ranks 2nd as a consumer of German products among the ASEAN
countries. As the automobile sector is the largest German export industry, the car and respective
component exports to Malaysia account for a large part of the German commodities that are sold
in Malaysia.
Description Exports in thousand
Parts & Components 221,397
Passenger Cars and Camping Vans 177,875Commercial Vehicles & specializedVehicles 3765
Other vehicles 3116
Total 406,153Table 1 - German automotive industry exports to Malaysia January to November 2011
Source: Federal Statistical Office Germany (2011)
In comparison to German exports to Malaysia, the imports remain on a rather low level as the
following table shows:
Description Exports in thousand
Parts & Components 64,446
Passenger Cars and Camping Vans 181
Commercial Vehicles & specializedVehicles 0
Other vehicles 1,980
Total 66,607Table 2 - German automotive industry imports from Malaysia January to November 2011
Source: Federal Statistical Office Germany
Several German automobile manufacturers have already engaged in the Malaysian market, but
most of them operate only in the segment of luxury cars of the automotive sector. Companies
such as BMW and Mercedes Benz use assembling facilities provided by their local partners. For
14http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/countries/malaysia/ accessed on 21st November 2011.
http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/countries/malaysia/http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/countries/malaysia/http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/countries/malaysia/ -
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models that are not assembled locally but imported, local partners with approved permits (APs)
are used. The distribution is conducted by the brand owners (for example BMW or Mercedes Benz)
and sold through various dealers. Components and spare parts manufacturers can either go on
joint venture like Continental Sime Tyres or set up their own manufacturing facilities like
Malaysian Automotive Lighting, Robert Bosch, Schmitter Automotive, Vogel Sitze, ZF Steering
excetera.
Overview of the Automotive MarketMalaysia: The biggest automobile customer market in South-East Asia
The history of the Malaysian automotive industry dates back to the early 1960s, when the
Malaysian government developed a policy to promote an integrated automotive industry to
strengthen its industrial base and reduce its dependency on the agricultural sector. The main
objective of the promotion of the automotive industry constituted the limitation of imports, the
reduction of expenses in foreign exchange, the creation of employment and the development of
the industrial sector. Even nowadays, the automotive industry is designated to boost the
countrys industrialization process and to enable it to reach the status of a developed nation by
2020. The Malaysian national automotive industry is not only one of the major industrial sectors,
but also represents a matter of national pride. In terms of fact and figures, the sector ranks
amongst the top 20 in the world and disposes of the largest passenger car market in the ASEAN
region.
In the 1960s and 1970s, the industry was fragmented and consisted of inefficient assembly plants.
The industrys progress to a well-developed manufacturing sector with regards to motor vehiclesas well as components can be traced back to numerous government incentives that were initiated
in the mid-1980s and remain until today. As a result of this policy two national car projects
Proton, which commenced operation in 1985, and Perodua, which was founded in 1994
dominate the automotive industry commanding 26% and 30 % respectively of the local market. In
the non-national car segment, Nissan held 6.5% of the market, while Toyota held 18% and Honda
6%.15
15The Financial Edge, Mo. 1
stof Dec. 2008
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The entry of Proton into the local automobile market resulted in massive structural changes in
the industry. The industry shifted from assembly activity to manufacture of vehicles and
automotive parts. The sales and the market share of Japanese cars, which had dominated the
market prior to the launch of Proton, were reduced as Malaysians bought their national car. The
success stories of Proton and Perodua were positively influenced by high tariffs imposed by the
government. Many analysts viewed the protectionist policies implemented by the Malaysian
government as the most intervening among ASEAN countries. As a consequence, national cars
market share amounted more than 59% of the total sales in 2009 and the market share of the twobig Malaysian car manufacturers Proton and Perodua still accounted to 59% in February 2011.16
In 2006 the government introduced the National Automotive Policy (NAP) that envisions the
progressive liberalization of the car market through strategic tie-ups and alliances in order to
eliminate competition.17
Today, with the opening of the market due to the ASEAN Free Trade Agreement (AFTA) the
national cars domestic market share has dropped to less than 60%. In ASEAN Malaysia is the third
biggest car market with 3 car manufacturers, 8 car assemblers, 9 motor assemblers and more
than 800 component manufacturers and employs more than 300,000 people.18 National car
dominance is expected to decline further with more liberalization in the near future.
In the Governments 2012 budget, several incentives for further development of the domestic
automotive industry were announced to be continued. Following global trend of environmental
friendly vehicles and fuel efficiency, 100 percent exemption for import and excise duties was
proclaimed to be continued until 31 December 2013.
Car imports and protectionist policies
To protect the local automotive industry, a number of import restrictions were imposed on
foreign vehicles.
With more than half a million sales per year, Malaysia is the biggest market for automobiles in
South-East Asia. For a long time Malaysia's government has protected its auto industry from
16MIDF Equity Beat (2011): Automotive Sector
17MACPA (The Malaysian Automotive Component Parts Manufacturers), March 2009
18MAI (2011)
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foreign competition by introducing an Asian material content policy, which included imposing
high tariffs as well as non-tariff barriers. "National autos", those manufactured by Malaysian
producers such as Proton and Perodua, benefit from preferential treatment compared to "non-
national" autos. The latter category includes even those automobiles that are manufactured in
Malaysia by foreign-owned companies. High excise duties, import duties of about 30%19 (non-
ASEAN) and so-called Approved Permits (APs) also belong to these restrictions. The Ministry of
International Trade and Industry (MITI) issues the latter only to qualified local personnel and
companies, which is the main reason for foreign companies to cooperate with local partners.However, measures have already been undertaken to reduce trade barriers, as the government is
forced to abolish this policy within the near future due to its obligations in the World Trade
Organization (WTO) and in the ASEAN Free Trade Agreement (AFTA). So far duties are defined
separately for Motor Cars, Four Wheel Drive Vehicles, others (like MPVs and Vans and Commercial
Vehicles) and whether the cars are from ASEAN or non-ASEAN countries. The duties can vary and
depend on the engine capacity as well as if the car was imported in CBU (Completely Built Up),
CKD (Completely Knocked Down) or MSP (Multi-Sourcing Parts) form. Irrespective of the form of
import, local taxes (Excise Duties and Sales Taxes) are imposed even on cars from ASEAN
countries.
2006 2007 2008 2009 2010 2011(Jan-Aug)
TotalTrade
RM5,460.00 RM5,945.00 RM6,689.30 RM6,408.20 RM4,947.20 RM6,666.10
Import RM3,860.00 RM4,005.00 RM4,625.10 RM4,423.90 RM5,498.40 RM4,487.70
Export RM1,600.00 RM1,940.00 RM2,064.20 RM1,984.30 RM2,573.20 RM2,179.40Table 3 - Auto Parts and Components Industry in Malaysia (in RM mil)
Source: MIDA
Production
Malaysia has now become one of the regions largest auto markets with vibrant production
activities. Currently, there are four National Automotive Projects in Malaysia:
Perusahaan Otomobil Nasional Bhd (Proton) Perusahaan Otomobil Kedua Nasional (Perodua)
19MAA (20.12.2010)
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Industri Otomotif Komersial (Inokom) Malaysian Truck and Bus (MTB)
Furthermore nine assemblers settled down in Malaysia, among them the Naza Automotive
Manufacturing Sdn. Bhd (NAZA) and Hinda Sdn. Bhd. Renowned international brands, such as
BMW, Landrover, Mercedes Benz, Peugeot, Renault, Scania from Europe and Nissan, Toyota,
Mitsubishi and Mazda from Japan are contracting and operating through the local Manufacturing
and Assembly Plants in Malaysia in order to fulfill the local content requirements. For morespecific cars, Bufori Motor Car Co. Sdn. Bhd. (www.bufori.com), TVR Sports Sdn. Bhd. And TD
Cars Sdn. Bhd. are manufacturing handmade sports cars. As the volume is less than 400 units per
year the company is not regarded as commercial producer. An overview about the development
of the volume of vehicles produced and assembled is given in the following table.
Year PassengerVehicles
CommercialVehicles
4x4 Vehicles Total Vehicles
Units %Change Units %Change Units %Change Units %Change
2000 295,318 36,642 27,235 359,195
2005 422,225 43.0% 95,662 161.1% 45,623 67.5% 56,351 56.9%
2006 377,952 -10.5% 96,545 0.9% 28,551 -37.4% 503,048 -10.7%
2007 403,245 6.7% 38,433 -60.2% 441,678 -12.2%
2008 484,512 20.2% 46,298 20.5% 53,081 20.2%
2009 447,002 -7.7% 42,267 -8.7% 489,269 -7.8%
2010 522,568 16.9% 45,147 6.8% 567,715 16.0%
2011 488,261 -6.6% 45,254 2.4% 533,515 -6.0%Table 4 - Motor Vehicle Production
Source: Malaysian Automotive Association
In 2011 the total production of motor vehicles amounted to 533,515 units, comprising 488,261
units of passenger vehicles and 45,254 of commercial vehicles. At present the automotive
industry employs 47,574 workers, with 25,111 workers employed in the motor vehicle assembly
industry and 22,463 workers employed in the motor vehicles parts and accessories industry.
http://www.bufori.com/http://www.bufori.com/http://www.bufori.com/http://www.bufori.com/ -
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Market shares
Considering the market shares in February 2011 both national carmakers continued to dominate
the market with a total share of 59%. Foreign company Toyota was outperforming against its two
other major non-national peers (Nissan, Honda) with 5600 units sold despite a decrease of its
sales volume. Meanwhile Honda increased its sales volume to 2254 units while Nissans market
share maintained at 6% with a smaller increase rate of the sales volume. All companies are using
a significant proportion of components in their local assemblies from other ASEAN countries, such
as Thailand and Indonesia.
Source:MIDF EQUITY BEAT
Investments
Investments from Jan-Aug 2011 in the automotive sector amounted RM1,929 million with a total
of 61 projects approved compared to 62 projects approved investments of RM1,914.6 million in
2010. Domestic investments amounted to RM1,350.4 million which contributed 70% share of the
total investment and increased during the last year (share of 79% in 2010) while foreign
investments totaled RM578.6 million (30% share of total investment).
29%
29%
13%
7%
6%
16%
YTD 2011 Market Share (March 2011)
Perodua
Proton
Toyota
Honda
Nissan
Others
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Sales
The Malaysian Automotive Association (MAA) registered from a marginal decrease of 7.5% in sales
of vehicles in 2011 to 599,887 units from 605,156 units in the previous year. Passenger vehicles
accounted for 535,112 units whereas the remaining units were commercial vehicles. After a
strong start in 2011, the sales were affected due to the disruption of the supply chain from
natural disasters in Japan and Thailand. In 2012 vehicle sales are expected to rise marginally to
615,000 units.20 The demand for Multi-purpose vehicles (MPV) and A-segment vehicles is
estimated to fall in 2012 whereas the popularity of hybrid vehicles is expected to grow by 60% to13,400 units.21
Year PassengerVehicles
CommercialVehicles
4x4Vehicles
Motorcycles* TotalVehicles
2000 282,103 33,732 27.338 165,013 343,173
2005 416,692 9,782 37.804 440,000 552,316
2006 366,738 90,471 33.559 422,550 490,7682007 442,885 44,291 449,820 487,176
2008 497,459 50,656 531,690 548,115
2009 486,342 50,563 536,905 536,905
2010 543,594 61,562 345,611 605,156
2011 535,112 64,765 450,244** 599,877Table 5 - Total Vehicles Sales
Source: Malaysian Automotive Association (MAA)* Malaysian Industrial Development Authority (MIDA** YTD Sept 2011
Distribution
The distribution market of CBUs (completely built-up units) in Malaysia is dominated by a few big
local companies, namely Sime Darby, DRB-Hicom, Naza Motor Trading and Cycle & Carriage
Bintang Bhd. National car manufacturers appoint one or more companies to act as a distributor
for them, while foreign carmakers choose different means to distribute their automobiles.
20MAA (2011)
21Business Times (2012)
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Import
In 2011 (Jan-Aug) Malaysia imported motor vehicles worth RM9.1159 billion (2010: RM11.2 billion,
2009: RM7.7 billion). Imports of car parts and components were RM 4.4867 billion in 2011 (Jan-
Aug) (2010: RM 5.5 billion, 2009: RM4.4 billion).
Export
Exports of motor vehicles in 2011 (Jan-Aug) amounted to RM654.2 million (2010: 938.2 million,
2009: RM741.5 million). Exports of parts and components were RM2.2 billion (Jan-Aug 2011)
(2010: RM2.6 billion, 2009:RM1.99 billion). Major export destinations are ASEAN countries, such as
Thailand and Indonesia, but large quantities are also transferred to China, Syria and UK.
Component industry
The launching of Proton in the early 1980s catalyzed the development of the ancillary and
supporting industries by creating opportunities for growth in the manufacturing of component
parts and accessories. Currently, there are more than 704 automotive components and partsmanufacturers and 110 motorcycle components and parts manufacturers.
Today there are about 45 vendors in the automotive component industry who has achieved the
capabilities and competency to design and develop, source components and parts and
manufacture the whole module/component both for the original equipment and replacement
markets. Malaysia continues to be one of the main producers and exporters of vehicle parts,
components and accessories in the region. These products have been accepted in Japan,
Germany and the UK due to their quality, compliance with international standards and
competitive prices. 22
Due to the dynamic development of the sector, the sales volume of components and parts could
register a steady growth during the last decades. In 2010, sales reached RM6.13 billion (RM 5.77
billion in 2009). Along with this, the local content of national cars of all ranges average between
50-90 % (PROTON) and 35-80 % respectively (PERODUA) while the percentage of local content in
domestically assembled foreign cars of all ranges average between 35-65%. 23
22ibid
23MIDA
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Local component manufacturers besides having the capability to export have also undertaken
cross border investment into the neighboring ASEAN countries, especially Thailand.
The National Automotive Policy (NAP)
Given the significant challenges facing the automotive industry, in particular globalization,
economic liberalization and increasing competition, the Malaysian government felt that there is a
need to review the strategic direction and policy framework for the domestic automotive sector.
This change towards a less regulated policy is crucial to maintain the competitiveness of the
domestic automotive sector in the country and internationally and to make it thus viable in the
long term. Having this in mind, the government launched the National Automotive Policy (NAP) in
March 2006, which primarily aims at progressive market liberalization. In September 2009, the
NAP was revised to encourage new investments, ensure a long term sustainability of the domestic
automotive industry, ensure safety and quality of products and services and protection of the
environment.
Some highlights on the revised NAP:
1) Manufacturing licence
Local assembly of luxury passenger cars above 1,800 cc or priced above RM150,000 is fully
liberalized. This means foreign firms are allowed to obtain manufacturing licence and can hold
100% equity in the companies.
However, Current policy on the freeze of manufacturing licence for reconditioning and
reassembling activities is maintained.
2) Amendments to the AP System (Approval Permit)
The issuance of APs will be stopped by end 2015.
3) Incentives
Incentives such as Pioneer Status/Investment Tax Allowance for the manufacture of critical
components for cars such as brake system and transmission
4) Safety standards
There would be a gradual introduction of Vehicle End of Life Policy. Vehicles above 15 years will
have to undergo mandatory inspection during road tax renewal.
5) Euro 4m specificationImplementing Euro 4m specification for petrol and diesel in 2011
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6) Tax/Duty
The Import Duty structure is maintained at 0% for CKD and 5% for CBU for AFTA. As for Excise
Duty, there are no changes.
7) Imports
From June 2011, it would be prohibited to import used parts/components.
8) Establishment of a strategic partnership for Proton
The quest is on for Proton to have a strategic partnership with a globally established
manufacturer.
Key developments since the NAP announcement
After signing an agreement for local vehicle assembly in December 2010, Volkswagen will be
offering CKD and CBU models through its domestic partner DRB-Hicom. The production roll-out at
DRB-Hicom Automotive Complex started in November 2011, cars are planned to be available in
2012.24 In collaboration with DRB-Hicom Volkswagen is aimed to a 10-fold production in its share
of the Malaysian passenger car market which currently just
comprises 1%. Therefore Volkswagen is constantly introducing new models to theMalaysian market.25
Peugeot has choosen Naza as its partner in spearheading its expansion in the ASEANregion; Malaysia will thus act as Peugeots regional hub. In 2011, Nasim Sdn Bhd, the
official distributor of Peugeot in Malaysia opened new facilities in the Malaysian peninsula
as well as in East Malaysia.26
Increasing interest in Hybrids; 297 units were sold in 2009 and since the 2011 budgetannouncement in Oct for 100% excise and duty tax exemption on Hybrids 1,500 units
reported bookings were made in a span of less than 3 months (Oct-Dec 2010). Proton announced its plans for the development of pure electric vehicles (PEV) for the
global market in the first quarter of 2009. Malaysias domestic carmaker hopes that the
government will introduce an incentive to spur Malaysians to move to EVs. Protons electric
vehicles are now in the test fleet stage, the commercialization of the cars is planned for
2013.
24Volkswagen Malaysia (2011)
25The Edge Financial Daily (2012)
26Peugeot Malaysia (2011)
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ASEAN/AFTA: An economic region grows together
In 2002, the ASEAN was founded to facilitate trading relations between the Asian countries in
particular, but global economy is also profiting from the commitment to encourage
competitiveness. Malaysia, as a member, is subjected to the policies decided upon in this
multilateral forum. Since then, it has thus gradually reduced trade barriers.
Over the years the government has dismantled its protective policies. Import duties on CKD
(completely knocked-down units) and CBU (completely built-up units) from ASEAN members have
been reduced to 0% and 5%. Duties from non-ASEAN countries for CKD have been reduced to 0%-
10%, while duties on CBU have now reached a 30%. Excise duties are imposed on all vehicles,
irrespective of their origin 27
The intra-ASEAN trade recorded a constant increase in the last years. The removal of trade
barriers within ASEAN has opened up a vast regional market for automotive companies which
stand to benefit from potential economies of scale and enjoy access to cost competitive
components produced in ASEAN countries.
Opportunities
1. Companies with new technology are highly sought after. Especially German companies withgood technical know-how are demanded by the local industry.
2. Companies with design and testing capabilities.3. Investment in areas of fuel-efficient engines and alternative fuel engines, conversion kits,
transmission system, automotive electric components and special purpose vehicles are
encouraged.
4. Collaboration with local vendors to supply the ASEAN and global markets.Platform of sourcing strategy: The multi-sourcing facility, which was introduced to enable
assemblers and franchise holders to import components and parts direct from cheaper
sources, has opened up means to penetrate into the regional and global market.
5. Training and skill upgrading programs that enhance productivity and product quality aresought after.
27MACPA (The Malaysian Automotive Component Parts Manufacturers), March 2009
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Automotive and Supplier Industry Fairs in Malaysia
Contact:
Mr. Thomas Brandt at: [email protected]
Ms. Michelle Lim at: [email protected]
We hope the market report serves you with actual information on the Malaysian market. Our
core business is to establish contacts, finding distribution partners, project acquisitions, etc. our
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AUTOMECHANIKA 2013
Date: March 2013Place: KL Convention Centre,
Kuala Lumpur, Malaysia
KL INTERNATIONAL MOTORSHOW 2013
Place: Putra World Trade Centre,Kuala Lumpur, Malaysia
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