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Malaysia: Automotive policy to benefit national carmakers the most

PETALING JAYA: The policies under the recently announced National Automotive Policy 2020 (NAP 2020), though considered a win for the local automotive sector in general, will benefit the national carmakers the most.

Kenanga Research said in a report that Perodua would be the biggest beneficiary of the NAP 2020, especially in light of the push towards the utilisation of green energy.

“Perodua, Malaysia’s first and largest energy-efficient vehicle (EEV) manufacturer with over 800,000 EEVs sold to date, has purchased a total of RM43.5bil worth of components from local suppliers, including RM5.4bil in 2019, and targeted to spend RM6bil for 2020.

“While on autonomous technology, Perodua, guided by Daihatsu Motor Co of Japan, has laid the foundation with its Advanced Safety Assist suite of driver assistance systems and have made it accessible to the masses.”

Additionally, the research house said UMW Toyota Motor Sdn Bhd believes that its Bukit Raja plant is equipped with automation, skilled manpower and the capacity to align with the government’s vision of developing the domestic industry into Industry Revolution 4.0, with further investment to introduce more completely-knocked-down hybrid cars in the future.

As for Proton, Kenanga said the national car company, with its ownership structure (50.1% DRB-HICOM, 49.9% Geely), could leverage its foreign partner’s technology capabilities.

Under the NAP 2020, the government will continue issuing EEV manufacturing licence while introducing next-generation vehicle manufacturing licence and freeze the issuance of non-EEV manufacturing licence.

“We believe the freeze on the issuance on non-EEV manufacturing licence means there will not be new permits for locally manufactured non-EEV compliant vehicle models. It is still uncertain when the freeze will take effect as there is no further details at this juncture, ” said Kenanga Research.

The research house said it did not expect Proton to be affected, as the national carmaker has already secured licences to manufacture its current vehicle models earlier, prior to the launch of the NAP 2020.

“Note that of all vehicles under the Proton fleet, only the X70 is EEV-compliant. We expect the upcoming X50 to be EEV-compliant as well.”

Meanwhile, MIDF Research said the NAP 2020 painted a clear way forward, focusing on positioning Malaysian automotive companies to face the upcoming disruption brought about by new technologies and business models emerging globally.

“Instead of an outright change, the NAP 2020 is rather an enhancement to NAP 2014, incorporating new elements in the areas of next-generation vehicles, mobility as a service business model and Industrial Revolution 4.0.

“The EEV programme remains intact albeit a review of specifications is in the works. The NAP 2020 documents still mention about ‘customised incentives’ but we think the scope is likely to be broadened to include the new technology elements, ” it said.

Source: https://www.thestar.com.my/business/business-news/2020/02/25/automotive-policy-to-benefit-national-carmakers-the-most