In the mid-1960s, when the Malaysian government started the auto industry with a call to manufacturers to assemble vehicles locally, the first ‘auto city’ began to form in the Klang Valley. Vehicle assembly plants were set up in the newly created Shah Alam industrial area of Selangor and related businesses also built factories nearby to supply them parts.
As the industry grew, other areas of the country also saw auto-related factories and businesses being developed. These were in the Tampoi area of Johor and also in Pekan, Pahang, where manufacturers like General Motors, Honda, Mitsubishi Motors, Fiat and Tata had their vehicles assembled.
Pekan in Pahang also has a small automotive manufacturing complex which was developed by DRB-HICOM since the 1980s. Carmakers such as Isuzu, Mercedes-Benz, Mitsubishi Motors and Volkswagen assemble their vehicles there today.
When the National Car project started in the early 1980s, the Proton factory was situated in Shah Alam, mainly because many suppliers were also in the Klang Valley which also has the largest concentration of new vehicle sales. Perodua, however, chose an area in northern Selangor near Rawang for its manufacturing complex but with the North-South Highway, it had easy connections to the Shah Alam area for suppliers to deliver parts.
By the late 1990s, the auto industry was booming and Proton was seeing rapid growth in volumes that it needed a second factory. Tanjong Malim in Perak was chosen and though far from the Klang Valley, the distance was no longer an issue with the highway connection that also went to Port Klang. DRB-HICOM even made plans to create a ‘Proton City’ which would be an ‘auto city’ like Toyota City in Japan and Detroit in the USA.
The Proton factory in Tg Malim, Perak.
However, the late 1990s saw the Asian Financial Crisis seriously affecting the country’s economy and projects like Proton City could not proceed as planned. It had been planned that suppliers would set up factories in the area to support the Proton factory which was designed to produce up to 500,000 vehicles. However, response was poor and with the severe downturn, the idea of Proton City could not take off although Proton began operations at its factory to make a new generation of models.
20 years later, the Proton City idea is restarting although this time, the concept has been updated to take into account changes in the auto industry. Rather than being just a ‘Proton City’, DRB-HICOM will develop the Tanjong Malim area into an Automotive Hi-Tech Valley (AHTV) with the aim of becoming an industry hub for the ASEAN region.
Besides supporting Proton, the AHTV is expected to attract businesses which are involved in new technologies and systems relevant to the global automotive industry. These would include electrification, Artificial Intelligence, autonomous technologies and advanced connectivity.
AHTV will be developed with an integrated ecosystem that will be a catalyst to revitalize domestic automotive sector in line with the direction of the National Automotive Policy 2020. Its aim is to bring Malaysia’s automotive industry to be on par, if not more advanced, than those in neighboring countries.
Perhaps it could help make Malaysia once again the best place in ASEAN to manufacture motor vehicles, which was the case in the 1970s. Back then, this country had the best infrastructure, a growing economy, well educated workforce and a level playing field which was attractive to investors.
An early supporter of the AHTV is the Geely Holding Group, which is also DRB-HICOM’s partner in Proton. The Chinese company has signed an MOU (Memorandum of Understanding) to jointly develop AHTV and collaborate to identify vendors and investors to the hub. The involvement of Geely, which has rapidly become a diverse global automotive group, will bring their technological strength in the automotive ecosystem as a boost for AHTV. This can be an impetus for auto and component manufacturers, especially from China, to invest in local production facilities, to create new business and export opportunities. Essentially, AHTV has the potential to become a gateway to ASEAN and other markets for companies that make it as their base. To date, there are already 17 vendors with facilities within the area.
DRB-HICOM has also signed another MoU with the Perak state government to jointly identify suitable additional land in the area for AHTV development. The current area surrounding the Proton factory measures 4,000 acres, with most already occupied by University Pendidikan Sultan Idris, factories of existing vendors, commercial premises and residential properties.
Part of the area originally developed as Proton City which will now be developed into the Automotive Hi-Tech Valley.
To boost the automotive talent pool in Malaysia, AHTV will establish a research university. This will create an educational framework to nurture a new generation of engineers for the automotive industry in areas of Engineering, IT, Design, Artificial Intelligence, Mobility Solutions & Software Development. This will strengthen local R&D capabilities and ensure competitiveness of local original equipment manufacturers.
The scale of the AHTV will see some 370,000 job opportunities being created in the area, with more than 160,000 opportunities during the first phase of development.
Datuk Aishah Ahmad, President of the Malaysian Automotive Association:
“Our members are generally satisfied with the NAP 2020 and glad that it is finally released. Now they are awaiting details of the incentives so that planning can be done for the years ahead. We wish for more transparency in this area in the interests of fairness for all investors.
NAP 2020 is looking ahead to the future generation of cars to be developed regionally and globally. It is aligned with the direction of neighbouring countries in ASEAN. For example, improving the fuel economy level in Malaysia by 2025 follows the ASEAN Fuel Economy Roadmap of for the transport sector.
However, some strategies might be a bit too advanced although NAP 2020 says that there will be phases of implementation. Though the technologies are available, it would be expensive and challenging to make big jumps within a short time.
The validity of NAP 2020 is up till 2030 which is quite a long time away. Perhaps as time goes on, there will be minor revisions in details as conditions change but the industry will feel comfortable if overall policies don’t change.”
Datuk Aishah Ahmad and Dato’ Zainal Abidin Ahmad
Dato’ Zainal Abidin Ahmad, President & CEO of Perodua:
“NAP 2020 shows consistency in the government’s policies to advance the Malaysian automotive ecosystem to the next level. This is apparent in the continued support for component localisation, which is the backbone of the country’s automotive industry.
Also consistent is the government’s commitment to further the Energy-Efficient Vehicle (EEV) programme, in which many players have invested.
Where Industry 4.0 is concerned, Perodua is a firm believer of technology convergence, particularly the integration of communication technology into automotive applications.
On autonomous technology, Perodua, guided by our technical and technology partner Daihatsu Motor Company of Japan, has laid the foundation with its Advanced Safety Assist (ASA) suite of driver assistance systems and crucially, we have made it accessible to the masses. This technology will be further improved in line with our aim to provide Malaysians with mobility that offers even greater safety and value.”
Direction and Strategies of the new National Automotive Policy
Dr. Li Chunrong, CEO of Proton:
“The unveiling of NAP 2020 shows Malaysia is moving towards the adoption of new technology vehicles featuring electric and hybrid powertrains as well as autonomous and connectivity technologies.
PROTON’s two shareholders grant us access to Malaysia’s automotive industry ecosystem as well as the technologies needed for NxGV models, one of the main thrusts of the policy.
There are still many steps to take and PROTON is confident with the correct policies in place, we will be able to contribute towards Malaysia achieving the goals set out in NAP 2020.”
Dr Li Chunrong and Ravindran K
Ravindran K., President of UMW Toyota Motor:
“We are pleased that the government has provided an updated ‘roadmap’ for the development of the industry and this will provide direction and guidance which will be of great value to forward planning, especially where investments in Malaysia are concerned.
With the Energy Efficient Vehicle (EEV) specifications being updated, UMWT hopes that ample time will be provided before implementation for proper review. It is also hoped that the government will continue to give incentives for a sufficient length of time. This will help to justify investment and provide reasonable returns on investment.
The planned reduction of carbon emissions from motor vehicles by improving the fuel economy level by 2025 is commendable. In support of this, UMW Toyota Motor is planning to introduce more locally-assembled hybrid vehicles in the future here in Malaysia. We urge the government to provide increased incentives to spur the hybrid market in Malaysia.”
Dr. Claus Weidner
Dr. Claus Weidner, President & CEO of Mercedes-Benz Malaysia:
“The new policy is a positive enhancement to the NAP 2014 as it aims to make Malaysia a regional automotive leader. We see the policy benefiting all players in the automotive industry.
The development and production of EEVs and NxGV with increased levels of automation is an explicit encouragement by the government on future mobility in Malaysia.
For Mercedes-Benz globally, the company’s Ambition 2039 is its strategic path towards sustainable mobility. We aim to increase the adoption in Malaysia by delivering sustainable and fascinating mobility to our customers.”
What was widely referred to as the ‘Third National Car Project’ and invited much debate has now become the New Malaysian Vehicle Project (NMVP) incorporated in the National Automotive Policy 2020 (NAP 2020). It is not specifically for a single model but is being implemented in line with the future direction and strategies of the Malaysian automotive industry to fulfil the National Automotive Vision.
Tun Dr. Mahathir Mohamad, the ‘Father of the Malaysian National Car’ made by Proton, feels that the car company is no longer ‘Malaysian’ with the dominance of a foreign carmaker (Geely) in its shareholding. Having always taken the position that Malaysia must have develop its own automotive technology through a truly Malaysian company, he now wants to have another go.
With the New Malaysian Vehicle Project, the focus will be on the development of manufacturing capabilities in a holistic manner as it involves the entire value chain and the automotive industry ecosystem. This is not 1985 where the aim was to create a larger car-making company to get economies of scale that could not be achieved in the fragmented industry with so many different brands competing.
Today, with more advanced technologies that are disruptive, a different approach has to be taken and this is where a fresh start with the NMVP is useful. However, where Proton got started and supported by the government (with taxpayers’ money), this new project will not have government funding, assured Tun Dr. Mahathir.
This is the only part of the ‘third national car’, as the New Malaysian Vehicle Project has been referred to, which was shown to the public at a display in the MITI building this morning. It will not be shown in public until an investor confirms interest in developing it.
While it has funded the initial development of a prototype – which is probably to serve as a ‘demo’ model – the hope is that there will be some company which will be interested in being involved in the venture and make the necessary investments.
Dreamedge, based in Cyberjaya, has been given a consultancy and management role but the ‘hardware’ is likely to come from a technology partner. Daihatsu has confirmed its involvement although many are puzzled why the Japanese carmaker is doing so when it already has a successful partnership with Perodua.
If Daihatsu is involved and supplies the platform and perhaps also the powertrains, then it is likely that the model will be a compact city car. This is where the carmaker has a lot of expertise and could be of great assistance.
Daihatsu has a lot of expertise in compact cars and can offer technical assistance for such vehicle development.
Dreamedge says the Core Philosophy of the model will ‘Fun to Drive’, a line which Toyota used about 40 years ago. Though it will have Daihatsu’s involvement, the NMVP will still be presented as a ‘For Malaysians by Malaysians’ product which, of course, is what the PM wants.
For now, information from Dreamedge which was shown at the lobby of MITI’s building tells us that it will be a High Value Proposition that can make it ‘the rakyat’s smarter choice for advanced mobility solutions’. Its advanced and interactive features will include ‘modern and futuristic styling, Fun driveability and great handling, IoT and connectivity, and Advanced Driver Assistance Systems’.
Tun Dr. Mahathir said the prototype, which he describes as a ‘car of the future’, is completed but will remain under wraps until there is a confirmed investor who will take it further in development and then commercialise it. As no government funding will be provided, the investor is likely to then expect incentives in order to offset development costs.
While most people talk of the NMVP as a single model, Tun Dr. Mahathir revealed that the project will actually see two cars and one motorcycle. “The new Malaysian Vehicle Project is expected to contribute significantly to the nation’s economic development through its support for both upstream and downstream industries. It can create demand for other related materials such as high-grade steel, plastics, rubber and petrochemical products, which will stimulate further growth of these sub-sectors,” he said.
Government policies for the automotive industry are not new and go back to the mid-1960s when the first one started off the domestic auto industry as part of the young country’s shift towards industrialization. Recognised as one of the industries that had been a catalyst for economic and industrial and economic growth in America, Japan and Germany, the early policies created a framework for the industry and the business which would continue to this day, promoting local production.
The first policies were aimed at encouraging foreign carmakers – there were no Malaysian ones then – to assemble locally and incentives were offered. Besides preferential import duties that would enable locally-assembled models (completely knocked-down or CKD in the industry language) to be sold at lower prices than those imported completely built-up (CBU) from factories in other countries, there was also a push to promote the development of ancillary industries such as the components industry.
One of the first carmakers to respond to the government’s call to assemble in Malaysia was Volvo, which set up the first plant in Shah Alam, Selangor, in 1967..
This saw the imposition of Mandatory Deletion for a certain number of items (around 20) such as paint, tyres, batteries, wire harnesses, windscreen glass, etc for which foreign companies had set up factories in Malaysia. To encourage this, a penalty tax of up to 3% (rising in 2% increments each year) was imposed on companies that did not include at least 8% of content made in Malaysia as at February 1968.
The basic policies for the auto industry were maintained until the 1990s when globalization made protectionist policies less acceptable. As a signatory (and founding member) of the World Trade Organization (WTO), Malaysia had to meet certain obligations with regards to fair trading practices although a grace period was given.
Among these agreements was the Trade Related Investment Measures (TRIMS) pact signed in 1994 which forbids measures by a government that require particular levels of local procurement (use of locally-made parts or local content) by any company or which restrict the volume or value of imports a business can purchase or use to an amount related (an example being the requirement to have an import permit which is not issued freely to all bonafide applicants).
Then there was also the ASEAN Free Trade Area (AFTA) which was formed. This was an attempt to create a big single market like the earlier European Economic Community (EEC) so that there would be greater attraction to investors as there was the potential of 500 million consumers.
Privileges such as duty-free exchange of goods and services between ASEAN countries were offered so that companies could set up production hubs and export around the region, achieving better economies of scale to lower production costs.
These developments impacted the somewhat insular Malaysian auto industry which had enjoyed protection in various ways since 1967. By 2002, the local content requirement was abolished and likewise the control of pricing (of CKD models) by the government also ended and market forces determined prices. Nevertheless, some protectionist elements were still retained although the NAPs have tried to moderate them.
The National Automotive Policy (NAP) provides a ‘road-map’ for participants in the Malaysian auto industry to do forward-planning, taking into consideration the fact that such planning often covers a time-frame of 5 to 10 years. It indicates the direction to be taken and the incentives available which matter a lot to those who consider investments running into the hundreds of millions.
The original NAP was not warmly welcomed as it was seen to be protectionist. Its failure to attract foreign carmakers (or even raise their investments) was acknowledged by the MITI minister then. While protecting domestic industry is in the ‘national interest’, there needs to be a balance if Malaysia wants to be the regional automotive hub it has long aspired to be.
Like the 2-year delay for the announcement of the previous NAP in 2014, the 2020 NAP was also delayed some time. Officially, MITI minister Datuk Ignatius Darell Leiking said that it had not been ‘delayed’ but was being ‘fine-tuned’. Anyway, the latest NAP has finally been launched today by the Prime Minister and it is the fourth one to be formulated since 2006.
NAP Number 4
The new NAP has been formulated with a more global view and a National Automotive Vision to guide the country to become a regional leader in manufacturing, engineering, technology and sustainable development. The overall expectation of what this forward-looking NAP can achieve is more R&D for new technologies, creation of business and job opportunities, and the development of new manufacturing processes and value chains within the local automotive and overall mobility sector.
Actually, the new NAP can be considered an enhancement of the previous one, facilitating the required revolution and optimal integration of the local automotive industry into regional and global industry networks.
The new policy is expected to be used until 2030 and in its framework, there are three directional thrusts which will focus on development of the Next Generation Vehicle (NxGV), Mobility as a Service (MaaS), and Industrial Revolution 4.0 (IR 4.0). There are also three strategies which are Value Chain Development, Human Capital Development, and Safety, Environment & Consumerism.
Just as old geographical maps used to be quite general in presentation and today’s digital maps can zoom right down to a house location, the NAP has no less than 4 detailed National Roadmaps that provide information and guidance, as well as another 3 National Blueprints that will serve as guiding principles and reference in implementing the measures and strategies of NAP 2020.
NAP 2020 Roadmaps and Blueprints
The objectives of the previous NAP continue and these include developing a competitive and capable domestic automotive industry as well as making Malaysia a regional automotive hub in Energy Efficient Vehicles (EEVs). There has always been a desire to increase exports of vehicles, but cost-competitiveness is challenging because the factories here do not have economies of scale to challenge the big ones in Thailand and Indonesia.
However, automotive components, spare parts and related products in the manufacturing and aftermarket sector have a better chance of being export-oriented and many Malaysian companies have already gained supply contracts overseas. Some of them even supply to companies in Japan, where high quality is expected.
EEV and NxGV
The EEV initiative began with the previous NAP and promoted the development of R&D capabilities for right-hand drive vehicles and related technologies, such as fuel efficiency, light materials, telematics, tooling and component design. NAP 2020 will continue this program with a review and revision of EEV standards, and will also include commercial vehicles and motorcycles above 250 cc.
NxGV is classified as a vehicle that meets the definition of future EEV classifications and is enhanced with Intelligent Mobility applications. NxGV vehicle technology has 5 levels and the minimum will be of Level 3 Vehicle Automation, ie Conditional Automation. So rather than being a new ‘vehicle type’, it appears to be essentially a more advanced EEV (which many of today’s models already qualify as).
By next year, standards for the NxGV will be announced to ensure safety requirements and protocols for high precision systems and processes, particularly electric vehicles (EVs). The aim is to have NxGV standards for all vehicles by 2025 so commercialization can proceed.
The National Automotive Vision
Unlike previous NAPs, the new one includes a National Automotive Vision which explains what the government wants to achieve so that efforts can be focused appropriately. The main aim is to make Malaysia a hub for exports of vehicles, exports of components and spare parts, automotive R&D, development of automotive and mobility-related technologies, and vehicle and component testing.
This vision, to be realized by NAP 2020, is aimed at promoting local manufacturing activities in vehicles and components which will reduce imports of vehicles and components as well as spare parts. At the same time, it also aims to implement the transformation of the automotive sector to enhance local engineering capabilities which in turn will create opportunities in the services sector for R&D, testing and technology development activities.
Mobility as a Service (MaaS)
MaaS is a concept to integrate various types of services and transport modes into an efficient and centralized mobility service. It provides a wide range of transportation options such as a combination of public transport services and private vehicles, besides enabling users to enjoy other services such as optimized product delivery services, online health diagnostics and others.
The Multimodal Transport system will be complemented by e-payment, telematics and connected living. As innovative new mobility services become available, MaaS will evolve to adopt them, ultimately benefiting the traveler and the environment, especially in urban areas. It will also create a new ecosystem that will strengthen and improve the automotive industry.
The technology thrust includes UAVs (like drones) and Air Mobility (the flying car?) which can be part of connected mobility in future. Specific measures call for coordination and development of regulations before mass utilization.
Industrial Revolution 4.0 (IR4.0)
IR4.0 refers to the application of digital technology beyond the technological elements under Industry4WRD. The use of IR4.0-related technology applications especially AI, Big Data Analytics and IoT (Internet of Things) will enable the implementation of NxGV and MaaS.
Digital technology came with the advent of the computer age in the 1970s and has become an integral element in the auto industry. IR 4.0 represents the digital transformation of the industry based on the adoption of new technologies for the progressive automation of the production process.
The key enabling technologies such as additive manufacturing, collaborative robotics, production planning tools, Artificial Intelligence, virtual reality, gamification, process simulation, operational intelligence, IoT, and Big Data Analytics requires a system that operates and manages information and infrastructures towards creating a connected mobility ecosystem.
The enabling technologies will soon drive the industry towards envisioning a connected and integrated environment, a system of vehicle-to-vehicle communications, cameras, variety of sensors (Radar, LIDAR, RFID, etc.) and other devices integrated with advanced algorithms that can monitor the road in a variety of road, weather and traffic conditions to enable autonomous systems.
Attracting investments, expanding the market
The NAP is intended to attract investments in order to meet its targets. As has been the case since the 1960s, there will be incentives which include more competitive investment opportunities, including a more comprehensive mechanism for Customized Incentives and assistance to facilitate business operations.
While ‘customized incentives’ sounds very investor-friendly, it also makes some companies uncomfortable when only criteria are made public. This was already apparent with the previous NAP where incentives were not totally transparent as interested investors were invited to have private meetings with the relevant agencies to discuss what they could offer and what could be given in return.
Global players especially (the ones which can make big investments) have felt this ‘back door’ approach does not make for fair negotiations as they do not know what another party may actually get. They point to countries like Thailand and Indonesia which make incentives clear, open and applicable to all parties who want to ‘play’. It could well be the reason Malaysia is not a high priority when it comes to considering investments in the auto industry and commonising incentives for all may be a better way.
With its limited market size, Malaysian businesses will clearly have to look beyond our borders to continue growing. The introduction of the elements of technology and services in NAP 2020 will create both the MaaS and IR4.0 ecosystems that will provide opportunities to expand access to international markets.
Malaysia has signed a number of Free Trade Agreements with different countries to help in export programmes and these will be further utilized. NAP 2020 also encourages the expansion of soft loans to promote new export areas such as NxGV, MaaS and IR4.0 related services, besides encouraging the use of eCommerce platforms to market products domestically and overseas.
Attention to safety and the environment
With increased concerns about climate change and reducing accidents, NAP 2020 also makes sure that there is attention given to new, more environmentally-friendly elements of technologies that will address the issue of pollution. One objective is to reduce carbon dioxide emissions from vehicles by improving the fuel economy level in Malaysia to 5.3 Lge/100 kms (Lge refers to Litres of gasoline equivalent) by 2025 in line with the ASEAN Fuel Economy Roadmap of for the transport sector.
Besides the move to B20 diesel yesterday and the planned move to B30 by 2025, the NAP also mentions that petrol specifications will go from the current Euro4M for both RON95 and RON97 to Euro5 by September 2025. That’s the sort of information which the industry welcomes as planning can be done to use more advanced and environment-friendly engines that require fuel of higher quality.
Focussing on the safety of vehicles and consumers will include consumerism elements to protect consumer rights related to spare parts and services. Long-overdue matters such as compulsory inspections for all types of vehicles will also be considered and there will be more R&D on motorcycle safety. Eventually, there is to be a proper testing facility to carry out inspections on vehicles that are submitted for Type Approval.
Bumiputera participation and APs
Recognising that the auto business had limited Bumiputera participation, the government introduced the Approved Permit (AP) system in 1970 to help Bumiputera businessmen enter the sector. The idea was for them to be able to import motor vehicles and start businesses which could grow and increase their presence in the industry.
NAP 2020 will continue with the support to Bumiputeras wanting to get into the automotive sector through participation in the supply chain and other new business activities. The controversial system, supposed to end on a few occasions, will also continue to provide opportunities to qualified Bumiputera automotive entrepreneurs to be involved in importation of used cars and motorcycles.
The 50-year old AP policy has helped Bumiputera companies like the NAZA Group grow and contribute to the local auto industry by making investments in manufacturing.
The fee for one AP is maintained at RM10,000 for one unit of car approved under the Open AP system. This rate is applicable for the first 35,000 units for all Open AP companies under the validity period of AP provision of the current year. The fee for the subsequent approved AP unit is RM20,000 for each vehicle unit imported by Open AP companies.
The New Open AP Policy also requires that the company granted with the AP must provide buyers with at least a 1-year warranty and maintenance service or in cooperation with the manufacturer for the maintenance service.
The Franchise AP Policy is also continued for the purpose of monitoring and data collection. This policy will be implemented in line with the improvements proposed for the automotive industry as a whole, by promoting and opening greater opportunities for participation of Bumiputeras in the automotive supply chain and not only focusing on being an importer.
New Malaysian Vehicle Project
Since last year, there has been talk of a third national car project and this project is incorporated in the NAP 2020. As it is of great interest to the public, we will provide insights in a separate article. The purpose of the new Malaysian Vehicle Project, which will develop 2 cars and 1 motorcycle, is in line with the future direction and strategies of the Malaysian automotive industry and helps to fulfil the National Automotive Vision. [Click here to read more about the New Malaysian Vehicle Project]
Targets by 2030
So what is expected to be achieved by 2030? NAP 2020 has many targets to aim for (as shown in the charts below). Some targets are compared to NAP 2014 but with different values; for instance, the target for exports by 2020 was 250,000 units (which is not reached) but by 2030, the target is set at RM12.3 billion. This is, of course, based on current values and who knows how things will change by the end of the decade.
Then there’s the Total Industry Volume (TIV) which refers to sales of new vehicles in the country – 1.22 million units by 2030. NAP 2014 had set a target of 1 million units in one year by 2020 but that was a rather ambitious number. Last year, the TIV was just over 600,000 units and the Malaysian Automotive Association, in consultation with the car manufacturers, has forecast growth of only 1% or 2% a year for the next 5 years.
The same over-optimism seems to be in production volumes although this could well get boosted if exports do grow rapidly or manufacturers begin to include Malaysia in their future investment/expansion plans as a means of having additional backup locations in the event of disruptions caused by floods, earthquakes or epidemics (as we are now witnessing). NAP 2014 had set an annual production volume of 1.35 million units by 2020 but last year, the total volume from 22 plants was around 570,000 units.
Parts exports are an area that has much potential, more than exporting completed vehicles.
Exports of components has much potential and where NAP 2014 set a target of RM10 billion, the aim is to reach RM28.3 billion in export value by 2030. This is an area where Malaysia could work towards becoming a regional hub since it is harder to be a hub for vehicles when the big factories in neighbouring countries already have high volumes. And with the emphasis on developing technologies that are more advanced in many fields, there could be an inclination for global suppliers to set up bases here. Of course, it still depends on incentives offered which must be attractive enough against other countries.
Also, the stability of policies must be assured and this seems to be promised with the ‘lifespan’ of this NAP set to cover the period up till 2020. A sufficiently long period gives investors more comfort in forward planning. But what some companies fear is while the policies may be maintained for 10 years, incentives might change since they are not openly stated and therefore can be varied at anytime for anyone.
