As usual, our Prime Minister, Dr Mahathir Mohamad has
created a new diversion or sensation with his idea of another national car for
the region. The cost of Proton with all its subsidies has been estimated at
RM14 billion up to 2015 (based on statement by Minister of MITI, Malaysia).
That excludes any opportunity cost.
For a small economy with total car sales of only 0.5 million
per annum, it is a heavy price to pay. Only a Chinese “rescue” saved Proton
from extinction. India’s “Ambassador”, a copy of the Morris Oxford (of the 50s)
was finally scrapped in 2015. And India doesn’t have a national car.
If Malaysia is in the forefront of self-driving technology
or has access to it with Google, Uber or some other major player, then it may
break new ground. But why would Google, GM or Ford work with Malaysia? The
world may also see driverless cars as-a-service (“Caas”) by 2025. That
technology could help reduce mobility costs whilst offering a safer alternative
to a human driver.
Big data and AI are playing an essential role in
customization of vehicles. But we (Malaysia) are not in any way in the lead on
Big data or AI. Hence, it is an uphill task to justify investment in an area we
have no comparative advantage.
It is better for us
to scrap the “Approved Permits” for importing cars by selected people and any existing
subsidies for the foreign owned Proton. The resistance to scrapping APs is
because the previous Government conducted a study that suggested the following:
·
RM450m per year contribution to service sectors
such as banking, insurance, shipping and logistics;
·
Collection by Government of RM2 billion in taxes
and fees per year;
·
Job opportunities to 3,800 high and medium
income earners; and
·
Provided 5% out of 36% bumiputra equity in automotive sector.
Be that as it may, the current Government needs to review
the Open AP Policy and if it benefits the cronies of the previous Government.
So no new national car, unless it makes a real technological
difference, and no more APs for selected people and please no more subsidies
for Proton or Perodua.
Reference: 1.
Karl Utermohlen,
“The Future Technology in the Automotive
Industry”,
2.
Economics Malaysia
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