It picked up momentum after the May 9 general election and the desolated automotive industry which has been lying quiet in the last couple of years, is all of a sudden rejuvenated with a renewed interest.
The election saw a change of government with the same man, who initiated the first national car project during his tenure as the fourth prime minister, making a comeback as the seventh prime minister. He is none other than Tun Dr Mahathir Mohamad.
First national carmaker Perusahaan Otomobil Nasional Bhd (Proton) was founded in 1983 with the first Proton Saga model launched in July 1985, while the second national car maker Perusahaan Otomobil Kedua Sdn Bhd (Perodua) was established in 1992 with its first model Perodua Kancil launched in August 1994.
Fresh from his appointment as the seventh prime minister, Dr Mahathir announced a plan to introduce the third national car project following the acquisition of a 49.9 per cent stake in Proton by Chinese automotive giant Zhejiang Geely Holding Group.
He asserted that the idea for the project was to reinvigorate the engineering capabilities of Malaysia that was facing a challenging time after Geely took over the engineering management of Proton as a result of the acquisition.
His idea, however, received mixed reaction from industry observers and players alike, with some voicing concern that the project could disrupt the market if the government were to instill a protectionism policy to help ensure success in the project.
Nevertheless, there is also a positive voice from the industry suggesting that the government look at future technology for the project such as electric vehicles compared to the traditional internal combustion engine.
Malaysia Automotive, Robotics and Internet of Things Institute (MARii) (formerly known as Malaysia Automotive Institute), the body that oversees the automotive sector in the country, came in support of Dr Mahathir, justifying why the third national car project was needed.
MARii chief executive officer Datuk Madani Sahari said the Malaysian automotive industry has already hit its peak and is starting to go down the ‘S-Curve’ technology life cycle.
“Therefore, a (new) national car project will gear Malaysia for the next phase, or a new S-curve for the industry,” he said in an article that was posted on the institute’s website.
He suggested that the project embody the latest technologies in line with global trends surrounding digitalisation, artificial intelligence, nano-engineering, data science and other new areas, and discipline in the future.
As the project is to be driven by the private sector, Madani also called for participations from original equipment manufacturers, vendors and relevant stakeholders in the project.
According to the Ministry of International Trade and Industry that oversees the development of the automotive industry in Malaysia, the government has received 21 proposals on the development of the project.
Word has it that a Qatari investor is keen to invest up to RM1.6 trillion in the project which showed the huge interest in such endeavour.
Another outcome from the election which has positively impacted the automotive industry is the zero-rating of goods and services tax from June to August.
The announcement has a significant impact on vehicles sales which saw a jump of 50.1 per cent in June compared to May and continued to hover above 60,000 vehicles per month until August.
Once the sales and services tax (SST) was reintroduced in September, vehicle sales fell 52 per cent.
Nevertheless, the Malaysian Automotive Association’s target of 585,000 total industry volume (TIV) for 2018 is well within reach.
For the January-November period, the country’s TIV stood at 550,506 units.
Perodua remained the market leader in passenger vehicles with 42.5 per cent market share, followed by Honda at 19.2 per cent with Proton trailing at 12 per cent.
This year, Perodua also saw changes at its top management with its longest-serving President and chief executive officer Datuk Dr Aminar Rashid Salleh, 58, set to retire on Dec 31 after nine years at the helm.
He will be succeeded by Datuk Zainal Abidin Ahmad, currently vice-president of Perodua Auto Corporation Sdn Bhd, effective Jan 1.
Meanwhile, in the 2019 Budget, the government announced the restructuring of petrol subsidy to become more targeted at the bottom 40 percent of the household income group (B40) and middle 40 percent of the household income group (M40), starting from the second quarter of next year.
Under the new initiative, only cars with engine capacity of 1,500cc and below, while motorcycles of 125cc and below will be eligible for fuel subsidy.
While the mechanism of the fuel subsidy implementation has yet to be determined, the announcement was seen as a disadvantage to Proton as most of their models had engine displacements of 1,600cc and above.
Proton Head of Engineering Yang Jun when met at the Kuala Lumpur International Automotive Conference 2018 (KLIAC) said the company had plans to introduce turbocharged model with engine capacity of 1,500cc soon.
Meantime, Proton has officially launched its much anticipated sport utility vehicle X70 on Dec 12 (with on-the-road price without insurance) ranging from RM99,800 for the standard two-wheel drive variant to RM123,800 for the high-end premium four-wheel drive.
Heading into 2019, the government is scheduled to introduce the much awaited new National Automative Policy or NAP 2019 in the first quarter of next year.
Deputy International Trade and Industry Minister Dr Ong Kian Ming had said the NAP would place emphasis on electric vehicles and new technologies.
He stressed that the main focus then (NAP 2014) was on energy efficient vehicles (EEVs) and now the country is moving more towards electric vehicles and new technologies.
• Mohd Khairi Idham Amran is attached to the economic desk of Bernama, the national news agency.
