MITI expected to allow car manufacturers to resume operations next week

The Ministry of International Trade and Industry (MITI) is expected to backtrack on its earlier decision to remove automotive manufacturing from its list of essential services sectors, and will allow automotive manufacturing to resume operations next week.

The government has yet to make an official announcement on the matter and those involved have been told to not speak to the media. However WapCar.my understands that discussions is almost complete and automotive manufacturing might be re-instated into the essential services list as early as this weekend.

To avoid any further backlash from the public for flip-flopping on its decisions, the reinstatement will most likely be conveyed quietly to industry players.

Better late than never. Although the repeated U-turns reflects badly on the government, at least this U-turn is for the better, and is made to correct a wrong move made earlier.

The industry needs to put this episode behind to push ahead to catch up for lost time. We’ve covered quite deeply on the subject in an earlier article here.

A report by The Malaysian Reserve quoted an industry source as saying, “The cost of production disruption for automotive sector is about RM160 million a day. It is a very costly, unnecessary event,” adding that backlogged orders is estimated at 150,000 units, about a quarter of the total industry volume (industry lingo for annual sales volume).

Earlier this week, MITI has come under heavy fire from automotive industry players for making an epic U-turn on allow automotive manufacturing to continue operating under MCO 2.0

On Monday 11-Jan 2021, the government announced the re-imposition of MCO in several states/Federal Territories including Penang, KL, Selangor, Putrajaya, Melaka, Johor, Labuan, and Sabah.

On Tuesday, MITI announced that automotive manufacturing, together with automotive repair and maintenance are considered essential services sector and thus will be allowed to operate in areas affected by MCO 2.0.

On Tuesday night however, MITI issued a revision, deleting automotive manufacturing from the essential services list, just hours before MCO kicks in on 12.01 am 13-January 2021.

Update 16-Jan 2021:

Just as we have reported, automotive manufacturing is now back on the essential services list. The document released by the National Security Council (MKN) this morning 12:25 am 16-Jan 2021 states that effective immediately, automotive manufacturing, including both vehicle assemblers and suppliers, can resume operations.