Review of Malaysian automotive policy

Ever since the new Pakistan Harapan government took office the gossip going around is about the potential 3rd national car project. Dr. Mahathir is undeniably sore about losing Proton to Geely and seems adamant about starting another national car maker which is not something the public is agreeable to. Proton has been proven to be a real burden to the public and since the automotive industry has been partially liberalised over the last 8 years the automotive industry has grown steadily. Foreign car makers have made significant inroads into Malaysia and gained market share through compliance with previous automotive policies that required them to increase local content for their cars.

Now that the Pakatan Government is studying the possibility of the 3rd national car there is now the possibility of imposing import restrictions for foreign brands. This has not gone down well with the public and of course this will have a direct impact on the foreign car companies who have invest millions of dollars to setup manufacturing or assembly plants in Malaysia. For the sake of one man's pride and ego, the cost to the public will be tremendous. Naturally, Dr. Mahathir will steer this idea in a different way saying that it is to improve the engineering know-how and improve the industry. Seeing the results from Proton in the past, it is unlikely that the 3rd car company will be very different so long as the management consist of the same bunch of corrupt individuals who ran Proton previously.

In fact, liberalising the automotive industry will attract far more foreign investment that is much needed at this juncture. Even the Malaysian Automotive Association is against the idea of starting the 3rd national car company. Overall the Malaysian automotive industry has improved significantly over the last 8 years and the industry is thriving. Imposing restrictions will just reverse all the work that have been done to liberalise the industry.

The 3rd national car company will not materialise considering the large number of people who are against the idea. Nobody wants another under performing Government linked company that will survive only because of protectionism. The car prices have gradually reduced over the years and it has helped many new buyers. The public wants a level playing ground and have the choice of buying a car they want.