In Cars, Local News / By Danny Tan / 31 July 2018 12:08 pm / 48 comments

Tun Dr Mahathir Mohamad won’t be letting go of his automotive dream easily. Yesterday, the prime minister raised the prospect of restricting imported cars to give priority to local cars, just like in the old days.

“We are now very open to accepting foreign brands. All cars, even those that are made out of ‘tin Milo’ are being allowed into Malaysia. But our cars are finding it hard to penetrate many other countries,” Mahathir said in the Dewan Rakyat in response to a query from Ayer Hitam MP Datuk Seri Wee Ka Siong about the third national car project the PM proposed.

“There are a number of factors that had made it difficult for Proton to penetrate the foreign market, which includes strict terms, conditions and policies that have been set by other developed countries. That is why we must review the possibility that certain conditions be imposed so that foreign-branded cars won’t make it to our shores that easily. And this will give the opportunity for our local cars to enter into our automotive market,” he added.

Raising barriers to restrict imports is a regressive move, says Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad, in remarks reminiscent of the US auto industry dissuading president Donald Trump to proceed with auto tariffs.

“Yes, it’s a regressive move for the auto market. I don’t think it is right for the government to say they want to put certain restrictions on carmakers, other than Proton, on cars being brought into the country,” Aishah told reporters after a briefing with the Council of Eminent Persons yesterday, reported by The Edge.

The opposite of restrictions is liberalisation, and that should be the way to go. “That (liberalising the market) is the way forward for the auto industry. If you want to create a conducive auto industry, then you have to liberalise the market,” she said, adding that setting restrictions on foreign cars to support the growth of national carmakers is against the spirit of the automotive market liberalisation, a policy designed to create a conducive market by allowing firms to compete on a level-playing field.

Who is the PM trying to protect anyway? It surely isn’t Perodua, which is doing better than ever, which leaves Proton. “Proton is no longer owned by the government…everybody should get the same treatment,” is Aishah’s response, pointing out that many foreign car companies have local operations and high local content. Again, this echoes the US auto industry’s point of view vis-à-vis the Trump administration’s.

“Even though you are talking about foreign cars in Malaysia, they are highly localised and so our policies should not be discriminatory. Honda, for example, has 70% to 80% local content and they cannot be considered as foreign cars, when they have such high local contents and assembled in the country,” the MAA head stressed, adding that all policies must be implemented without discrimination.

There’s more than one way to develop the local automotive industry. One is as per Tun’s template: make our own car. The other is to follow the path of Thailand and Indonesia: be a factory of the world. The MAA is for the latter. Aishah says that by providing a level-playing field, Malaysia will be taking a step in the right direction to replicate our neighbours’ success stories.

“Thailand is exporting 1.3 million cars and Indonesia is supplying more than 100,000 cars to the global market. Ever since the government created Proton in 1983, the country’s car exports have been at a mere 20,000 units to 30,000 units, which is much less than our neighbouring markets,” she said.

Unsurprisingly, Aishah isn’t too thrilled about the proposed new national car company. She said the government should reconsider its plan and conduct a thorough feasibility study before going ahead with the idea, as it is a highly capital-intensive venture. Also, Malaysia is a small market with annual total industry volume hovering around 600,000 units.

“What we don’t want is further incentives provided for (the) new national car (company), which (will) really disrupt the industry. It will not help the industry at all,” she said bluntly.

I think it’s safe to say that most Malaysians aren’t excited about going back to an era when national cars were forced on the rakyat due to protectionist measures, and the PM knows it. Do you want a jaguh kampung in an arena where the hands of the other players are tied to their backs? Also, which cars are Tun referring to when he mentions ‘tin Milo’ imported cars? It’s not the first time he has used the term.

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