market watch 2012 - automotive-1

7/27/2019 Market Watch 2012 - Automotive-1

1/15

Market Watch 2012

The Malaysian Automotive and Supplier Industry

General information about Malaysia

Malaysia is centrally located within the Association of South-East Asian Nations (ASEAN).

Consisting of two regions separated by the South China Sea the Malaysian Peninsula and the

states of Sabah and Sarawak on the island of Borneo Malaysia is a federation of 13 states and

three federal territories. The former British colony gained its independence in 1957. SinceIndependence, Malaysia has adopted the political system of a parliamentary democracy with a

constitutional monarch whose position is rotated every five years between each of the nine

hereditary state rulers. The political scene has been characterized by an extra-ordinary degree of

political stability and continuity through an encompassing national coalition of political parties.

Its territory comprises approx. 330,000 sq km, four fifths of which are covered by tropical

rainforest. Due to its bio-diverse range of flora and fauna offering excellent beaches and brilliant

scenery, the country is one of the regions key touristic destinations. Malaysia is a mult i-ethnic,

multicultural and multilingual society with 28.66 million members. Ethnic Malays make up the

majority of the population at 57.1% followed by Chinese at 24.6%, Indian at 7.3% and other local

ethnicities at 11%. The Malaysian constitution guarantees freedom of religion, although Islam is

the largest and official religion. Approx. 61.3% of the population practice Islam, 19.8% Buddhism,

9.2% Christianity, 6.3% Hinduism, and 2.6% practice Confucianism and other traditional Chinese

religions. The official language of Malaysia is Bahasa Malaysia, but English as well as Chinese are

the business languages.

Economical Overview

Malaysia is a dynamic country which is constantly evolving. Being a middle-income country,

Malaysia has transformed itself since the 1970s from a producer of raw materials into an

emerging multi-sector economy spurred on by high technology, knowledge-based and capital-

intensive industries. Malaysias Economic Performance ranking improved to 7th place out of 59

economies this year compared with 12th position in 2007.1 It is one of the 20 largest trading

nations worldwide and was headed of Taiwan, Sweden, Canada, Australia, the United Kingdom

1Malaysias economy attains 7thposition, New Straits Times, 20th May 2011.


2/15

Market Watch 2012, The Malaysian Automotive and Supplier Industry

2

and Switzerland.2 The World Competitiveness Yearbook 2011 Report released by the Institute for

Management Development (IMD) continued to rank Malaysia as among the top 5 most competitive

nations in the Asia-Pacific region, taking 6th position in the 20 million population category and 2nd

position after Taiwan in the GDP per capita less than US$20,000 category.3 Moreover, the country

is the 21th largest exporter among all trading nations worldwide.

Strategically located in the heart of South-East Asia, Malaysia offers a cost-competitive location

for investors intending to set up offshore operations in order to manufacture advancedtechnological products for both regional and international markets. In addition, Malaysia has a

market-oriented economy which is supported by pro-business government policies. Last year, the

Malaysian Government launched the Economic Transformation Programme (ETP) which is

managed by PEMANDU (Performance Management & Delivery Unit) under the patronage of the

Prime Minister.4The ETP identifies 12 National Key Economic Areas (NKEAs) which are drivers of

economic activities that have the potential to materially contribute to the growth of Malaysia. Its

objective also known as Vision 2020 is to transform Malaysia into a high income country

by year 2020. The programme will lift Malaysias Gross National Income (GNI) to US$523 billion by

2020, and raise per capita income from US$6,700 to at least US$15,000, meeting the World Bank's

threshold for high income nation.5 To achieve the targets set, Malaysia needs an annual growth of

GNI of 6%. There are plans to revitalize Malaysia's private sector, to grow the service sector from

58 to 65% and to create 3.3 million new jobs.6 The Government will also introduce other

transformation plans in 2012.7

In Malaysia, the 2011 GDP growth edged lower to 4.0 percent year-on-year due to a weaker

domestic demand. Further implementation of ETP projects and a RM232.8 billion 2012 Budget

tabled by Prime Minister Datuk Seri Najib Razak will boost domestic demand, but unlikely to

offset underperformance in net exports8.

2 Ibid.3 Ibid.4 Seewww.pemandu.gov.my.5 Forbes.com, 21st September 2011.6 Ibid.7Malaysia Budget 2012 Main Highlights,www.financesentral.comaccessed on 21st November 2011.8 Malaysian Economic outlook by Malaysian Institute of Economic Research (MIER),www.mier.org.my/outlook21.11.
http://www.pemandu.gov.my/http://www.pemandu.gov.my/http://www.pemandu.gov.my/http://www.financesentral.com/http://www.financesentral.com/http://www.financesentral.com/http://www.mier.org.my/outlookhttp://www.mier.org.my/outlookhttp://www.mier.org.my/outlookhttp://www.mier.org.my/outlookhttp://www.financesentral.com/http://www.pemandu.gov.my/


3/15


3

Economical Key facts Malaysia9

Currency: 1 Ringgit (RM) = 100 Sen

Exchange rates: 1 EURO = RM4.3; 1 US$ = RM3.2 (17.11.2011)

GDP (billion RM): 2009: 679.94; 2010:765.97; 2011: 829.34

GDP - real growth rate: 2010: 7.2%; 2011: 4.0%, 2012: 5.0% (est.)10

Inflation rate: 3.3-3.5 % (est. 2012 IMF)

Exports: RM513.59 billion (Jan- Sep 2011)

Exports - commodities: Electronics 34.5%; petroleum & products 9.9%; palm oil

9.3%; chemical products 6.9%; machinery 3,4%; manufactures

of metal 3.0%; rubber products 2.6%

Exports partners: Singapore 13.3%, China 12.5%, Japan 10.5%, USA 9.5%,

Thailand 5.3%, Hong Kong 5.1%, Germany: 2.7%

Imports: RM424.37billion (Jan Sep 2011)

Imports - commodities: Electronics 31.2%, petroleum & products 10.1%, chemical

products 9.2%, machinery 8.0%, manufactures of metal 5.9%,

transport equipment 5.1%, iron & steel products 4.3%, optical

& scientific equipment 3.2%, processed food 2.2%, other

products 20.8%

Imports - partners: Japan 12.6%, China 12.6%, Singapore 11.4%, USA 10.6%,

Thailand 6.2%, Germany 4.0%

Unemployment rate: 3.0% (2011)11

Average wage 2011: Project manager IT: RM8,415, lecturer/speaker: RM3,459,

mechanical engineer: RM3,070, account executive: RM2,572,plantation worker: RM85012

Population below poverty line: 3,6%13

9 Malaysia External Trade Development Corporation (MATRADE),www.matrade.com.my.10 Malaysian Institute of Economic Research (MIER),www.mier.org/outlook/ accessed on18th November 2011.11 Bank Negara Malaysia, Economic and Financial Data for Malaysia, last updated on 14th November 2011.12www.payscale.com/research/MY/Conutry=Malaysia/Salaryaccessed on 21th November 2011.13Index Mundi,www.indexmundi.com/g?r.aspx?v=69accessed on 18th November 2011.
http://www.matrade.com.my/http://www.matrade.com.my/http://www.matrade.com.my/http://www.mier.org/outlook/http://www.mier.org/outlook/http://www.mier.org/outlook/http://www.payscale.com/research/MY/Conutry=Malaysia/Salaryhttp://www.payscale.com/research/MY/Conutry=Malaysia/Salaryhttp://www.payscale.com/research/MY/Conutry=Malaysia/Salaryhttp://www.indexmundi.com/g?r.aspx?v=69http://www.indexmundi.com/g?r.aspx?v=69http://www.indexmundi.com/g?r.aspx?v=69http://www.indexmundi.com/g?r.aspx?v=69http://www.payscale.com/research/MY/Conutry=Malaysia/Salaryhttp://www.mier.org/outlook/http://www.matrade.com.my/


4/15


4

Bilateral Trade: Malaysia & Germany

Malaysia is EUs second largest trading partner inside ASEAN, behind Singapore, with bilateral

trade in goods reaching 31.9 billion Euros in 2010 and the EUs 22nd largest trading partner.

Germany enjoys intensive trade relations with Malaysia and is one of the main foreign investors in

Malaysia, while among members of the European Union, Germany is Malaysias leading trade

partner.14 Besides, Malaysia ranks 2nd as a consumer of German products among the ASEAN

countries. As the automobile sector is the largest German export industry, the car and respective

component exports to Malaysia account for a large part of the German commodities that are sold

in Malaysia.

Description Exports in thousand

Parts & Components 221,397

Passenger Cars and Camping Vans 177,875Commercial Vehicles & specializedVehicles 3765

Other vehicles 3116

Total 406,153Table 1 - German automotive industry exports to Malaysia January to November 2011

Source: Federal Statistical Office Germany (2011)

In comparison to German exports to Malaysia, the imports remain on a rather low level as the

following table shows:

Description Exports in thousand

Parts & Components 64,446

Passenger Cars and Camping Vans 181

Commercial Vehicles & specializedVehicles 0

Other vehicles 1,980

Total 66,607Table 2 - German automotive industry imports from Malaysia January to November 2011

Source: Federal Statistical Office Germany

Several German automobile manufacturers have already engaged in the Malaysian market, but

most of them operate only in the segment of luxury cars of the automotive sector. Companies

such as BMW and Mercedes Benz use assembling facilities provided by their local partners. For

14http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/countries/malaysia/ accessed on 21st November 2011.
http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/countries/malaysia/http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/countries/malaysia/http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/countries/malaysia/


5/15


5

models that are not assembled locally but imported, local partners with approved permits (APs)

are used. The distribution is conducted by the brand owners (for example BMW or Mercedes Benz)

and sold through various dealers. Components and spare parts manufacturers can either go on

joint venture like Continental Sime Tyres or set up their own manufacturing facilities like

Malaysian Automotive Lighting, Robert Bosch, Schmitter Automotive, Vogel Sitze, ZF Steering

excetera.

Overview of the Automotive MarketMalaysia: The biggest automobile customer market in South-East Asia

The history of the Malaysian automotive industry dates back to the early 1960s, when the

Malaysian government developed a policy to promote an integrated automotive industry to

strengthen its industrial base and reduce its dependency on the agricultural sector. The main

objective of the promotion of the automotive industry constituted the limitation of imports, the

reduction of expenses in foreign exchange, the creation of employment and the development of

the industrial sector. Even nowadays, the automotive industry is designated to boost the

countrys industrialization process and to enable it to reach the status of a developed nation by

2020. The Malaysian national automotive industry is not only one of the major industrial sectors,

but also represents a matter of national pride. In terms of fact and figures, the sector ranks

amongst the top 20 in the world and disposes of the largest passenger car market in the ASEAN

region.

In the 1960s and 1970s, the industry was fragmented and consisted of inefficient assembly plants.

The industrys progress to a well-developed manufacturing sector with regards to motor vehiclesas well as components can be traced back to numerous government incentives that were initiated

in the mid-1980s and remain until today. As a result of this policy two national car projects

Proton, which commenced operation in 1985, and Perodua, which was founded in 1994

dominate the automotive industry commanding 26% and 30 % respectively of the local market. In

the non-national car segment, Nissan held 6.5% of the market, while Toyota held 18% and Honda

6%.15

15The Financial Edge, Mo. 1

stof Dec. 2008


6/15


6

The entry of Proton into the local automobile market resulted in massive structural changes in

the industry. The industry shifted from assembly activity to manufacture of vehicles and

automotive parts. The sales and the market share of Japanese cars, which had dominated the

market prior to the launch of Proton, were reduced as Malaysians bought their national car. The

success stories of Proton and Perodua were positively influenced by high tariffs imposed by the

government. Many analysts viewed the protectionist policies implemented by the Malaysian

government as the most intervening among ASEAN countries. As a consequence, national cars

market share amounted more than 59% of the total sales in 2009 and the market share of the twobig Malaysian car manufacturers Proton and Perodua still accounted to 59% in February 2011.16

In 2006 the government introduced the National Automotive Policy (NAP) that envisions the

progressive liberalization of the car market through strategic tie-ups and alliances in order to

eliminate competition.17

Today, with the opening of the market due to the ASEAN Free Trade Agreement (AFTA) the

national cars domestic market share has dropped to less than 60%. In ASEAN Malaysia is the third

biggest car market with 3 car manufacturers, 8 car assemblers, 9 motor assemblers and more

than 800 component manufacturers and employs more than 300,000 people.18 National car

dominance is expected to decline further with more liberalization in the near future.

In the Governments 2012 budget, several incentives for further development of the domestic

automotive industry were announced to be continued. Following global trend of environmental

friendly vehicles and fuel efficiency, 100 percent exemption for import and excise duties was

proclaimed to be continued until 31 December 2013.

Car imports and protectionist policies

To protect the local automotive industry, a number of import restrictions were imposed on

foreign vehicles.

With more than half a million sales per year, Malaysia is the biggest market for automobiles in

South-East Asia. For a long time Malaysia's government has protected its auto industry from

16MIDF Equity Beat (2011): Automotive Sector

17MACPA (The Malaysian Automotive Component Parts Manufacturers), March 2009

18MAI (2011)


7/15


7

foreign competition by introducing an Asian material content policy, which included imposing

high tariffs as well as non-tariff barriers. "National autos", those manufactured by Malaysian

producers such as Proton and Perodua, benefit from preferential treatment compared to "non-

national" autos. The latter category includes even those automobiles that are manufactured in

Malaysia by foreign-owned companies. High excise duties, import duties of about 30%19 (non-

ASEAN) and so-called Approved Permits (APs) also belong to these restrictions. The Ministry of

International Trade and Industry (MITI) issues the latter only to qualified local personnel and

companies, which is the main reason for foreign companies to cooperate with local partners.However, measures have already been undertaken to reduce trade barriers, as the government is

forced to abolish this policy within the near future due to its obligations in the World Trade

Organization (WTO) and in the ASEAN Free Trade Agreement (AFTA). So far duties are defined

separately for Motor Cars, Four Wheel Drive Vehicles, others (like MPVs and Vans and Commercial

Vehicles) and whether the cars are from ASEAN or non-ASEAN countries. The duties can vary and

depend on the engine capacity as well as if the car was imported in CBU (Completely Built Up),

CKD (Completely Knocked Down) or MSP (Multi-Sourcing Parts) form. Irrespective of the form of

import, local taxes (Excise Duties and Sales Taxes) are imposed even on cars from ASEAN

countries.

2006 2007 2008 2009 2010 2011(Jan-Aug)

TotalTrade

RM5,460.00 RM5,945.00 RM6,689.30 RM6,408.20 RM4,947.20 RM6,666.10

Import RM3,860.00 RM4,005.00 RM4,625.10 RM4,423.90 RM5,498.40 RM4,487.70

Export RM1,600.00 RM1,940.00 RM2,064.20 RM1,984.30 RM2,573.20 RM2,179.40Table 3 - Auto Parts and Components Industry in Malaysia (in RM mil)

Source: MIDA

Production

Malaysia has now become one of the regions largest auto markets with vibrant production

activities. Currently, there are four National Automotive Projects in Malaysia:

Perusahaan Otomobil Nasional Bhd (Proton) Perusahaan Otomobil Kedua Nasional (Perodua)

19MAA (20.12.2010)


8/15


8

Industri Otomotif Komersial (Inokom) Malaysian Truck and Bus (MTB)

Furthermore nine assemblers settled down in Malaysia, among them the Naza Automotive

Manufacturing Sdn. Bhd (NAZA) and Hinda Sdn. Bhd. Renowned international brands, such as

BMW, Landrover, Mercedes Benz, Peugeot, Renault, Scania from Europe and Nissan, Toyota,

Mitsubishi and Mazda from Japan are contracting and operating through the local Manufacturing

and Assembly Plants in Malaysia in order to fulfill the local content requirements. For morespecific cars, Bufori Motor Car Co. Sdn. Bhd. (www.bufori.com), TVR Sports Sdn. Bhd. And TD

Cars Sdn. Bhd. are manufacturing handmade sports cars. As the volume is less than 400 units per

year the company is not regarded as commercial producer. An overview about the development

of the volume of vehicles produced and assembled is given in the following table.

Year PassengerVehicles

CommercialVehicles

4x4 Vehicles Total Vehicles

Units %Change Units %Change Units %Change Units %Change

2000 295,318 36,642 27,235 359,195

2005 422,225 43.0% 95,662 161.1% 45,623 67.5% 56,351 56.9%

2006 377,952 -10.5% 96,545 0.9% 28,551 -37.4% 503,048 -10.7%

2007 403,245 6.7% 38,433 -60.2% 441,678 -12.2%

2008 484,512 20.2% 46,298 20.5% 53,081 20.2%

2009 447,002 -7.7% 42,267 -8.7% 489,269 -7.8%

2010 522,568 16.9% 45,147 6.8% 567,715 16.0%

2011 488,261 -6.6% 45,254 2.4% 533,515 -6.0%Table 4 - Motor Vehicle Production

Source: Malaysian Automotive Association

In 2011 the total production of motor vehicles amounted to 533,515 units, comprising 488,261

units of passenger vehicles and 45,254 of commercial vehicles. At present the automotive

industry employs 47,574 workers, with 25,111 workers employed in the motor vehicle assembly

industry and 22,463 workers employed in the motor vehicles parts and accessories industry.
http://www.bufori.com/http://www.bufori.com/http://www.bufori.com/http://www.bufori.com/


9/15


9

Market shares

Considering the market shares in February 2011 both national carmakers continued to dominate

the market with a total share of 59%. Foreign company Toyota was outperforming against its two

other major non-national peers (Nissan, Honda) with 5600 units sold despite a decrease of its

sales volume. Meanwhile Honda increased its sales volume to 2254 units while Nissans market

share maintained at 6% with a smaller increase rate of the sales volume. All companies are using

a significant proportion of components in their local assemblies from other ASEAN countries, such

as Thailand and Indonesia.

Source:MIDF EQUITY BEAT

Investments

Investments from Jan-Aug 2011 in the automotive sector amounted RM1,929 million with a total

of 61 projects approved compared to 62 projects approved investments of RM1,914.6 million in

2010. Domestic investments amounted to RM1,350.4 million which contributed 70% share of the

total investment and increased during the last year (share of 79% in 2010) while foreign

investments totaled RM578.6 million (30% share of total investment).

29%

29%

13%

7%

6%

16%

YTD 2011 Market Share (March 2011)

Perodua

Proton

Toyota

Honda

Nissan

Others


10/15


10

Sales

The Malaysian Automotive Association (MAA) registered from a marginal decrease of 7.5% in sales

of vehicles in 2011 to 599,887 units from 605,156 units in the previous year. Passenger vehicles

accounted for 535,112 units whereas the remaining units were commercial vehicles. After a

strong start in 2011, the sales were affected due to the disruption of the supply chain from

natural disasters in Japan and Thailand. In 2012 vehicle sales are expected to rise marginally to

615,000 units.20 The demand for Multi-purpose vehicles (MPV) and A-segment vehicles is

estimated to fall in 2012 whereas the popularity of hybrid vehicles is expected to grow by 60% to13,400 units.21

Year PassengerVehicles

CommercialVehicles

4x4Vehicles

Motorcycles* TotalVehicles

2000 282,103 33,732 27.338 165,013 343,173

2005 416,692 9,782 37.804 440,000 552,316

2006 366,738 90,471 33.559 422,550 490,7682007 442,885 44,291 449,820 487,176

2008 497,459 50,656 531,690 548,115

2009 486,342 50,563 536,905 536,905

2010 543,594 61,562 345,611 605,156

2011 535,112 64,765 450,244** 599,877Table 5 - Total Vehicles Sales

Source: Malaysian Automotive Association (MAA)* Malaysian Industrial Development Authority (MIDA** YTD Sept 2011

Distribution

The distribution market of CBUs (completely built-up units) in Malaysia is dominated by a few big

local companies, namely Sime Darby, DRB-Hicom, Naza Motor Trading and Cycle & Carriage

Bintang Bhd. National car manufacturers appoint one or more companies to act as a distributor

for them, while foreign carmakers choose different means to distribute their automobiles.

20MAA (2011)

21Business Times (2012)


11/15


11

Import

In 2011 (Jan-Aug) Malaysia imported motor vehicles worth RM9.1159 billion (2010: RM11.2 billion,

2009: RM7.7 billion). Imports of car parts and components were RM 4.4867 billion in 2011 (Jan-

Aug) (2010: RM 5.5 billion, 2009: RM4.4 billion).

Export

Exports of motor vehicles in 2011 (Jan-Aug) amounted to RM654.2 million (2010: 938.2 million,

2009: RM741.5 million). Exports of parts and components were RM2.2 billion (Jan-Aug 2011)

(2010: RM2.6 billion, 2009:RM1.99 billion). Major export destinations are ASEAN countries, such as

Thailand and Indonesia, but large quantities are also transferred to China, Syria and UK.

Component industry

The launching of Proton in the early 1980s catalyzed the development of the ancillary and

supporting industries by creating opportunities for growth in the manufacturing of component

parts and accessories. Currently, there are more than 704 automotive components and partsmanufacturers and 110 motorcycle components and parts manufacturers.

Today there are about 45 vendors in the automotive component industry who has achieved the

capabilities and competency to design and develop, source components and parts and

manufacture the whole module/component both for the original equipment and replacement

markets. Malaysia continues to be one of the main producers and exporters of vehicle parts,

components and accessories in the region. These products have been accepted in Japan,

Germany and the UK due to their quality, compliance with international standards and

competitive prices. 22

Due to the dynamic development of the sector, the sales volume of components and parts could

register a steady growth during the last decades. In 2010, sales reached RM6.13 billion (RM 5.77

billion in 2009). Along with this, the local content of national cars of all ranges average between

50-90 % (PROTON) and 35-80 % respectively (PERODUA) while the percentage of local content in

domestically assembled foreign cars of all ranges average between 35-65%. 23

22ibid

23MIDA


12/15


12

Local component manufacturers besides having the capability to export have also undertaken

cross border investment into the neighboring ASEAN countries, especially Thailand.

The National Automotive Policy (NAP)

Given the significant challenges facing the automotive industry, in particular globalization,

economic liberalization and increasing competition, the Malaysian government felt that there is a

need to review the strategic direction and policy framework for the domestic automotive sector.

This change towards a less regulated policy is crucial to maintain the competitiveness of the

domestic automotive sector in the country and internationally and to make it thus viable in the

long term. Having this in mind, the government launched the National Automotive Policy (NAP) in

March 2006, which primarily aims at progressive market liberalization. In September 2009, the

NAP was revised to encourage new investments, ensure a long term sustainability of the domestic

automotive industry, ensure safety and quality of products and services and protection of the

environment.

Some highlights on the revised NAP:

1) Manufacturing licence

Local assembly of luxury passenger cars above 1,800 cc or priced above RM150,000 is fully

liberalized. This means foreign firms are allowed to obtain manufacturing licence and can hold

100% equity in the companies.

However, Current policy on the freeze of manufacturing licence for reconditioning and

reassembling activities is maintained.

2) Amendments to the AP System (Approval Permit)

The issuance of APs will be stopped by end 2015.

3) Incentives

Incentives such as Pioneer Status/Investment Tax Allowance for the manufacture of critical

components for cars such as brake system and transmission

4) Safety standards

There would be a gradual introduction of Vehicle End of Life Policy. Vehicles above 15 years will

have to undergo mandatory inspection during road tax renewal.

5) Euro 4m specificationImplementing Euro 4m specification for petrol and diesel in 2011


13/15


13

6) Tax/Duty

The Import Duty structure is maintained at 0% for CKD and 5% for CBU for AFTA. As for Excise

Duty, there are no changes.

7) Imports

From June 2011, it would be prohibited to import used parts/components.

8) Establishment of a strategic partnership for Proton

The quest is on for Proton to have a strategic partnership with a globally established

manufacturer.

Key developments since the NAP announcement

After signing an agreement for local vehicle assembly in December 2010, Volkswagen will be

offering CKD and CBU models through its domestic partner DRB-Hicom. The production roll-out at

DRB-Hicom Automotive Complex started in November 2011, cars are planned to be available in

2012.24 In collaboration with DRB-Hicom Volkswagen is aimed to a 10-fold production in its share

of the Malaysian passenger car market which currently just

comprises 1%. Therefore Volkswagen is constantly introducing new models to theMalaysian market.25

Peugeot has choosen Naza as its partner in spearheading its expansion in the ASEANregion; Malaysia will thus act as Peugeots regional hub. In 2011, Nasim Sdn Bhd, the

official distributor of Peugeot in Malaysia opened new facilities in the Malaysian peninsula

as well as in East Malaysia.26

Increasing interest in Hybrids; 297 units were sold in 2009 and since the 2011 budgetannouncement in Oct for 100% excise and duty tax exemption on Hybrids 1,500 units

reported bookings were made in a span of less than 3 months (Oct-Dec 2010). Proton announced its plans for the development of pure electric vehicles (PEV) for the

global market in the first quarter of 2009. Malaysias domestic carmaker hopes that the

government will introduce an incentive to spur Malaysians to move to EVs. Protons electric

vehicles are now in the test fleet stage, the commercialization of the cars is planned for

2013.

24Volkswagen Malaysia (2011)

25The Edge Financial Daily (2012)

26Peugeot Malaysia (2011)


14/15


14

ASEAN/AFTA: An economic region grows together

In 2002, the ASEAN was founded to facilitate trading relations between the Asian countries in

particular, but global economy is also profiting from the commitment to encourage

competitiveness. Malaysia, as a member, is subjected to the policies decided upon in this

multilateral forum. Since then, it has thus gradually reduced trade barriers.

Over the years the government has dismantled its protective policies. Import duties on CKD

(completely knocked-down units) and CBU (completely built-up units) from ASEAN members have

been reduced to 0% and 5%. Duties from non-ASEAN countries for CKD have been reduced to 0%-

10%, while duties on CBU have now reached a 30%. Excise duties are imposed on all vehicles,

irrespective of their origin 27

The intra-ASEAN trade recorded a constant increase in the last years. The removal of trade

barriers within ASEAN has opened up a vast regional market for automotive companies which

stand to benefit from potential economies of scale and enjoy access to cost competitive

components produced in ASEAN countries.

Opportunities

1. Companies with new technology are highly sought after. Especially German companies withgood technical know-how are demanded by the local industry.

2. Companies with design and testing capabilities.3. Investment in areas of fuel-efficient engines and alternative fuel engines, conversion kits,

transmission system, automotive electric components and special purpose vehicles are

encouraged.

4. Collaboration with local vendors to supply the ASEAN and global markets.Platform of sourcing strategy: The multi-sourcing facility, which was introduced to enable

assemblers and franchise holders to import components and parts direct from cheaper

sources, has opened up means to penetrate into the regional and global market.

5. Training and skill upgrading programs that enhance productivity and product quality aresought after.

27MACPA (The Malaysian Automotive Component Parts Manufacturers), March 2009


15/15


15

Automotive and Supplier Industry Fairs in Malaysia

Contact:

Mr. Thomas Brandt at: [email protected]

Ms. Michelle Lim at: [email protected]

We hope the market report serves you with actual information on the Malaysian market. Our

core business is to establish contacts, finding distribution partners, project acquisitions, etc. our

Office-in Office will give you a permanent address to develop the market. Please contact us

for further information.

AUTOMECHANIKA 2013

Date: March 2013Place: KL Convention Centre,

Kuala Lumpur, Malaysia

KL INTERNATIONAL MOTORSHOW 2013

Place: Putra World Trade Centre,Kuala Lumpur, Malaysia
mailto:[email protected]:[email protected]:[email protected]:[email protected]

market watch 2012 - automotive-1

Documents