Malaysia's possible 3rd national car company

Malaysia first introduced Proton in the early 1980s followed with Perodua in the 1990s and now that Dr. Mahathir is back in power he is planning to setup the third national car company since Proton has been sold to China's Geely. Proton was a good idea at the time it was created but it was far too inefficient in its operation and management. The management was resting on its laurels for far too long and did nothing to improve the company. It was riddled with enormous corruption on all levels which crippled the company.

Perodua on the other hand did well under the guidance of Daihatsu Japan which started chipping away at Proton's market share. By 2010 Perodua was the market leader and secured its position as the top car company by a comfortable margin. No other company came close to challenging Perodua for the market leader status. It simple formula or building affordable and reliable compact cars worked well for Malaysia. Technical support from Daihatsu Japan made a difference and the models were extremely popular among the young buyers. Proton started slipping further back as its new models were not well received and the buyers would shy away from Proton due to its notorious reputation for poor quality assembly.

Now that Dr. Mahathir, the founding father of Proton is back again as the country's Prime Minister he is adamant in introducing another car company but this time it is likely to be an electric car rather than the traditional combustion engine car. Electric cars are the future with more countries announcing bans on combustion engine cars. Having the third car company as an electric car maker would be a sensible idea but saying that the Malaysian population is just too small to support another domestic car maker. The public is also tired of having to pay high prices due to high import taxes for imported cars. Local car makers have been protected for too long and it has deprived the public the possibility of buying imported cars at reasonable prices.

From what is speculated by the motoring media the third car company is likely to be used as a platform to export electric cars to South East Asian countries to capitalise on the Asean Free Trade Agreement. Building an electric car comes with its set of challenges mainly the charging points or lack of it at the moment. Malaysia's Go-green initiative have not really gained much traction and the emphasis on electric car charging has been weak. Only a dozen or so shopping malls have charging points and with only 3 to 4 charging bays which is nowhere near enough. In order to support an electric car company the country needs at least 2000 charging locations with 8 to 10 charging bays per location considering the fact that it takes at least 1 hour to get any reasonably usable charge in the battery when using a faster charger.

Companies such as Petronas need to get involved to provide support for charging bays at their gas stations since Petronas stations are scattered all over the country. There must be sufficient revenue for Petronas to justify this infrastructure investment.

Dr. Mahathir is now exploring the possibility of working with an existing electric car maker in China for technical assistance to setup the third national car but it still early days yet. It is unlikely that the first car will be sold in the next 2-3 years.