Malaysia’s automotive industry faces acute shortage of manpower

KUALA LUMPUR (BERNAMA) – Malaysia’s automotive manufacturing industry is facing an acute shortage of workers which could derail the national automotive manufacturing (NAM) ecosystem if not resolved immediately.

Proton Vendor Association President Dato’ Dr Wan Mohamed bin Wan Embong said the NAM ecosystem might collapse with the loss of more than 500,000 jobs and wiping out up to 4.5 per cent of national gross domestic product (GDP) if the manpower issues in the industry are not being addressed promptly.

“Malaysia should allow foreign workers intake with no further delay and lower the recalibration cost of about three to five million illegal immigrant workers to address the shortage,” he told Bernama recently.

He said the current cost for legalisation of illegal foreigners stands at MYR4,500 per person, which is prohibitively expensive especially when the companies are struggling to recover from the COVID-19 pandemic, lockdowns and also recent flash floods.

Wan Mohamed also stressed that hiring of foreign workers by the automotive manufacturing ecosystem does not rob locals from the job opportunities as the industry has been putting lots of effort in hiring locals even though most of them often resign within six to 12 months of hiring.

“We must understand that severe shortage derails the economic recovery for the automotive industry, causes stoppages and under production at original equipment manufacturers. The current situation faced by the industry is that because vendors do not have enough workers and they cannot produce the parts, other vendors are being affected too, hence the production cannot move according to target,” he said.

He said the situation has caused many car buyers to wait longer for their vehicles after orders been placed with a maximum waiting period of four months. Due to the labour shortage, he said the cost of manpower had also increased from MYR80 per day last year to MYR125 per day to date resulting in high turnover or higher wastages.

Meanwhile, Perodua Suppliers Association President Musa Zahidin Ahmad Zaidee said the industry has been equipped with training facilities for the people especially for locals but unfortunately, many of them quit within a few months, leaving the vendors to face challenges in upskilling and increasing production to meet the demand.

“We must also bear in mind that foreign workers are not cheap as it becomes costly with the accommodation, levy and permit expenses. This is why the legalisation of illegal foreigners is crucial,” he said.