madani wm

The CEO of the Malaysia Automotive Industry (MAI), Datuk Madani Sahari has stated that the thrusts of the National Automotive Policy (NAP 2014) and free trade agreements (FTA) will enhance the competitiveness of the Malaysian automotive sector on a global perspective.

In a column on the New Straits Times, the CEO highlighted, that with the recent signing of the Trans-Pacific Partnership (TPPA) agreement, the ability of local automakers to compete on a global scale is a topic of much discussion. However, he noted that the country’s population of 30 million represents too small a market to rely on, when it comes to developing and expanding the local auto industry.

“It is important to embrace the change that is taking shape at the global level – the world market is more open, consumers are more demanding and the environment impact of production is becoming more pertinent,” Madani pointed out. With that, he stated that enhanced competitiveness is needed in all aspects, including social, economic or governance.

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On the topic of the NAP 2014, Madani explained that the third revision was announced with a focus on the global competitiveness of the entire ecosystem of the Malaysian auto industry, calling to mind the three thrusts that propels it: incentivising investments, technology development and market expansion.

“These three thrusts promote an interdependence with global market forces to enhance domestic automotive players towards becoming a greater force on the global stage,” Madani wrote. He went on to explain that increased investments from both domestic and foreign direct investments (FDI), will allow for local players to mobilise talents and capabilities.

On technology development, the CEO stated that technology penetration is far more efficient when local talent could work together with experts over the world. As for market expansion, Madani said that it is only possible when “export barriers are removed to create a level-playing field.”

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On the topic of free-trade agreements (FTAs), it will bring in opportunities for participation in the global economy, which is needed for the development of the Malaysian automotive industry, Madani explained. He exemplified that the locally-made electric bus, developed through the Malaysia-Australia Free Trade Agreement was but one of the favourable outcomes.

He provided another example, “It is noteworthy that Malaysia’s vehicle component sector has been fully liberalised,” he added, and as a result, exports have grown from RM1 billion in 2005 to RM12 billion in 2015. With that being said, he acknowledged that MAI is fully aware of threats that local players would be exposed to with a liberalised market.

Madani therefore urged that the gradual liberalisation of the automotive industry be supplemented with programmes to boost the competitiveness of local players. Six roadmaps that were launched alongside the NAP2014, focuses directly on Energy Efficient Vehicles (EEVs). This, Madani wrote, will also “chart a path towards globalisation of Malaysia’s automotive sector.”