• Malaysian automotive industry showed ‘continuous holistic growth’ in 2017 – Mustapa

    Published: Thursday, 18 January 2018
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    The Malaysian automotive industry demonstrated “continuous holistic growth” in 2017, as we enter into the fifth year of the 2014 National Automotive Policy (NAP). This was said at the Updates on the Automotive Industry 2017 and Outlook in 2018 event held in Kuala Lumpur today, where minister of international trade and industry Datuk Seri Mustapa Mohamad briefed the media.

    The main pillar of NAP 2014 was Energy Efficient Vehicles (EEVs), and the regulators are happy with the rate of EEV adoption in our market. EEV penetration increased for the fourth straight year, reaching 52% of vehicles sold in the country last year. That’s 2% higher than the target set.

    The figure was 42.8% last year, so it’s a jump of nearly 10%. Of these fuel efficient vehicles, 83.2% were petrol powered, 13% were diesels and 3.8% were hybrids.

    MITI says that 19 carmakers are offering EEVs in Malaysia and EEV production volume rose from 247,912 units in 2016 to 308,807 units last year, higher than the target of 260,000 units. Malaysia’s definition of EEV is much broader than Thailand’s eco car programme and Indonesia’s Low Cost Green Car programme though, and does not have size or price constraints – full explanation here.

    “This continuous growth is a signal of growing awareness of EEVs within the Malaysian automotive sphere. The acceptance and awareness of energy efficiency is not a function of a single ministry, but signals the support and participation of all government institutions, automotive OEMs and vendors, as well as the public,” Mustapa said.

    Exports of automotive parts and components are expected to increase in 2017, as the industry recorded total export value of RM9.3 billion as at October 2017. The 2016 total value was RM11.2 billion and the Malaysian Automotive Institute (MAI) expects 2017 figures to surpass the RM12 billion mark.

    Exports of remanufactured (reconditioned) parts and components was valued at RM516.4 million as of November 2017. This is already higher than last year’s total value of RM510 million.

    While automotive parts and components, both new and recond, are a bright spot, Mustapa said that he was “disappointed” with the performance of CBU car exports, which has hovered around the RM1 billion mark for a few years without much progress. The minister said that moving forward, more focus will be put on parts exports.

    Mustapa elaborated that the size of the automotive industry in Malaysia – which contributes 4% of the country’s GDP and employs over 730,000 people – requires a holistic outlook, as high value employment and business opportunities create significant impacts for Malaysians, which are often overlooked in favour of singular indexes such as sales and production figures.

    Speaking of employment, the auto industry hired 27,175 people in 2017, a 4.93% increase from 2016. Mustapa emphasised that 23,444 foreign workers were replaced by locals in an industry that employs 736,632 in total.

    “The growth of the automotive industry has created new career opportunities for Malaysians. Certified human capital programmes have been developed by MAI since 2014, not only to allow faster penetration of skills into the industry, but at the same time address the pertinent issue of foreign worker replacement among industry players,” Mustapa said.

    This is the fourth and final annual report card for NAP 2014. A new National Automotive Policy is work in progress and will be revealed by mid 2018. - Paultan

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