Datuk Seri Johari Abdul Ghani has said that local content used in locally-assembled (CKD) vehicles must generate value throughout the Malaysian supply chain.
“Looking only at Tier 1 suppliers no longer provides an accurate picture. We must trace value creation throughout the supply chain – whether they are Tier 1, Tier 2 or Tier 3 – to ensure that incentives reward genuine Malaysian capability rather than imported content disguised as localisation,” the head of the ministry of investment, trade and industry (MITI) said in his speech at today’s launch of the MCE Auto Hub in Serendah, Selangor.
Johari added that vehicle manufacturers are encouraged to strive to increase the amount of local content in their products. “If you can bring 10%, tell us when you can bring 20%. How do you bring the local content to 20%? If you already have 20%, how do you bring it to 30%? If you already have 30%, how do you bring it to 40%?” he said.
“When you reach that level, I – as minister – will go around the world to promote your product. That’s what I want to do because this can be considered a Malaysian-made product even though the brand is owned by all of you. This is what I want to do to ensure that we consistently build our capabilities locally,” he added.
Raising local content in vehicles assembled here is nothing new and has always been the focus of the government. The issue of local content was also brought up by MITI in its statement on BYD’s CKD factory.
Johari’s statement is aimed at vehicles that have a vast majority of their components imported from overseas but put together in Malaysia, which does not benefit local suppliers as they may be relegated to supplying basic components like batteries or minor trim pieces. This also limits potential knowledge transfer as they are not involved in supplying more advanced components, which jeopardises the Malaysian supplier ecosystem.
Looking to sell your car? Sell it with Carro.
Nonsense la. All your crony type c suppliers just rebadge parts from china