Proton LogoProton Vendors Association President Dr Wan Mohamed has spoken in defense of allegations that automotive parts sourced from Malaysia can be up to 50% more than those made in Japan. He says that these studies comparing parts prices have questionable materials and methods and even then, they only reveal parts prices between 5% to 15% higher than those in Japan, and in selected sub-sectors only.

According to Dr Wan Mohamed, the Perodua Myvi and Perodua Viva achieved a market price lower than its predecessors because of its 80% parts localisation compared to the Kelisa’s 65% local parts. He argued that if Malaysian parts was indeed more expensive, the cheaper prices for the new Perodua vehicles could not be achieved.

He also cited a few examples on why Japanese parts can be priced cheaper including lower finance charges of as low as 1% per annum for Japanese automotive vendors, lower cost and easy availability of raw materials in Japan, lower mould, die and production line costs, lower amortization and depreciation costs, and a higher degree of automation that Malaysian vendors with lower economies of scale cannot achieve.

He also added that Malaysian vendors have higher levels of wastage due to process rejects due to lower input in R&D but did not go into detail.

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