At last Friday’s launch of the National Automotive Policy 2020, DreamEdge brought out a prototype of its new national car project, which we’ve already showed you. Next to the boxed NNCP were actual national carmakers occupying the top two spots in the market today – Perodua and Proton.

Perodua had a Myvi and a mini display of its Advanced Safety Assist (ASA) system in its corner. But what caught our eye was the content on the booth’s background. Basically, it shows Perodua’s journey in Malaysia over the years, the milestones it has achieved, and also the company’s efforts and responsibilities in growing the Malaysian auto industry. What P2 has done for Malaysia, in short.

Now, the typical headlines involving Perodua usually has some sales or market share record, but the company is also very proud of its role in supporting the local vendor community and the automotive ecosystem as a whole. Because of its volume and high level of localisation, it buys a lot from local suppliers – for 2020, P2 expects to purchase RM6 billion of Malaysian-made parts, up from RM5.4 billion last year.

Perodua does three main things to play its part in the development of the local industry – the enhancement of R&D capabilities, the promotion of localisation and the development of local human resources. By developing its R&D capabilities and coming up with global levels of quality and cost; it benefits the company, its people and the local auto industry as a whole by raising standards.

Perodua has a vendor support centre (VSC) which ultimate goal is to improve vendor profitability and expand export opportunities for the suppliers. P2’s partner Daihatsu provides training support, and there’s also the resident support (RS) programme, where Perodua staff are “planted” in the vendors. These RS staff live and work as employees of the vendor, but their salary continues to be paid by P2. The RS programme has been ongoing since 2017.

Underpinning the big contribution to the local auto landscape is the high local content of Perodua’s cars. In the kei car era of the Kancil, Kenari and Kelisa, the localisation rate was between 60% to 80%. It stepped up a gear with the first-gen Myvi (86%) and has continued to rise ever since. Perodua’s three most recent new models – Bezza, third-gen Myvi and Aruz – have 95% local content.

Why not 100%? Perodua is part of the wider Toyota group, and when there are parts that can be shared to lower costs, it’s only logical to go for it. The NR family of engines, for instance, are widely used by Toyota and Daihatsu throughout the region. In a globalised market, parts come from all over the world – for instance, Hyundai’s South Korean plants has been facing shortage of parts from China due to the COVID-19 coronavirus outbreak gripping China. Nissan had to temporarily stop production in Japan for the same reason.

Lastly, scale. Perodua’s contribution to the local automotive industry is so big because well, Perodua is quite big itself. The Sg Choh-based carmaker recorded an all-time sales record of 240,341 units last year, with nearly 40% market share. In fact, since 1994, Perodua has churned out 3.7 million cars. The more you make, the more parts you need, it’s as simple as that.

And there’s more to come as well – Perodua is preparing a hot new SUV model for this year, underpinned by a plan to almost double its spending in investment for 2020, to a whopping RM1.06 billion (+86.2% from 2019).

“Half of it, about RM500 million, is related to factory investments, in modernisation, expansion as well as preparation for a future model,” president and CEO Datuk Zainal Abidin Ahmad said.

The company is also aiming to be an R&D hub for ASEAN, developing products with – and for – Daihatsu for the region. While acknowledging that the Japanese compact car expert has a sizeable arm in Indonesia, Zainal Abidin says that Perodua is ahead of Astra Daihatsu Motor in R&D. “In terms of R&D, at this moment Perodua R&D, in terms of testing equipment, investment and facilities, is bigger than Indonesia,” he said.

It’s clear that as the Malaysian market leader grows, the local automotive ecosystem, and the country itself, benefits along the way. It’s symbiotic.