Is Our National Automotive Policy Jinxed?

The most recent version of the National Automotive Policy (NAP) was launched in February 2020. This was by the then PM, Dr Mahathir Mohamad. Then he gladly resigned. Is that a jinx?

Today the NAP for 2020-2030 is in the dustbin of history or in suspended animation. With an acronym like NAP, it is unlikely to move forward.

Source: https://www.malaysia-today.net

The objectives of NAP were to contribute to high-value employment and upgrade Malaysia’s manufacturing capability. The global trend is towards electric vehicles (EVs) to reach carbon neutrality.

Thailand and Indonesia are in sync with regard to EVs. China’s Great Wall bought GM’s plant in Rayong, Thailand and will make mid-size SUVs powered by internal combustion engines, hybrids and EVs. The starting price for these vehicles is competitive at RM126,000.

LG and Hyundai have a joint venture to manufacture traction motor batteries in Indonesia to support global exports of Hyundai’s EVs.

Malaysia doesn’t have the scale of Thailand, Indonesia or Vietnam to attract investors. The combined ASEAN market of 600 million people produces 4.15 million vehicles (2019). But each nation vies for investments from the same carmakers. So, we end-up with scale inefficient local assembly plants.

Yamin Wong from FMT (1 August) suggested four ways for the Malaysian automotive industry to grow:

1. encourage sales of EVs with tax waivers, subsidies and other instruments that have been adopted and proven effective in China, Norway, Holland, Germany and the U.K.;
2. realise EVs need new skills including computer hardware and software;
3. develop environmental policies that reflect EU’s Green Deal and EC’s Fit for 55 so that components qualify for exports; and
4. achieve alliances with carmakers to develop green hydrogen economy for commercial fleets (Japan is a possibility). Toyota has championed hydrogen fuel-cell EVs.

MOSTI, MITI and the Malaysian Green Technology and Climate Change Centre should work with Toyota and Hyundai on hydrogen fuel. After all, Malaysia has the first hydrogen bus service in ASEAN. Launched in January 2020, three Sarawak metro buses operate in Kuching.

So, what could we do with the NAP? Nothing with the present Government, they are presently napping. We need to organise a more solid picture of the future with incentives for local and foreigners to invest and consumers to change their purchase pattern. Perhaps a more “inspiring” Government could do that!

Reference:

A jinxed National Automotive Policy besets Malaysia, Yamin Wong, August 1, 2021, www.freemalaysiatoday.com