National Automotive Policy

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Sectors in the automotive industry -
The automotive industry has three major sectors: assembly of motor vehicles, component parts manufacturing, and motorcycle assembly. There are 14 motor vehicle assembly and manufacturing plants including two national car projects: Proton, which manufactures passenger cars; and Perodua, which produces passenger and commercial vehicles. Nine companies are involved in motorcycle assembly. Other car plants include Nissan, Toyota, and KIA. There are more than 350 automotive component parts manufacturers in Malaysia, which combines locally owned companies and subsidiaries of multinational corporations. Let’s start by comparing Malaysia with the top automotive producers in ASEAN, Thailand. According to OICA statistics, Thailand produced 957,623 cars in 2012 and 1,525,420 commercial vehicles, for a total of 2,483,043 units. That figure represents a leap forward with a 70.3 percent year on year growth in automotive manufacturing, the largest of countries reported. Adopting its early focus on building simple assembly operations that utilized imported components, Thailand rejected the path of manufacturing a "national" car brand and rather invited in leading auto manufacturers to build units in the country for the domestic market and for export. Malaysia’s' pragmatic government policies, economic stability, well-developed infrastructional facilities and an educated and skilled labour force have attracted major international automotive and component manufacturers to invest in Malaysia. The rapid growth of the economy and the high purchasing power of its population have made Malaysia the largest passenger car market in ASEAN.(as reported by MIDA, Transport Industry Division of the Malaysian Industrial Development Authority. August 2010).

Malaysia has a ratio of 200 cars for every one thousand people in the country, and this has made the country among the highest car ownership ratio in the region. Because of the high ratio,...
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