Minister: This is why Malaysia's automotive sector is unsuccessful

Sanjay · Aug 10, 2020 04:17 PM

In a parliament sitting last week, Minister of Entrepreneur Development and Cooperatives (MEDAC) Datuk Seri Dr Wan Junaidi Tuanku Jaafar explained why Malaysia lags in the automotive sector. 

"Focusing on the automotive sector, we can see that Proton and the government policies back then were stumbling blocks to the development of the national automotive industry,” said Wan Junaidi, in response to a question posed by Datuk Seri Ahmad Maslan (BN, Pontian) at the Dewan Rakyat sitting last Wednesday.

“One of the issues is the taxes we impose on imported cars, of which Proton gets ‘special treatment’ from the government. This has stifled investments from foreign carmakers who originally wanted to invest in Malaysia, but moved to Thailand instead. Thus, this policy should be re-examined in order to further develop Malaysia’s automotive industry.”

For example, our tax structure is such that it costs more for foreign manufacturers to produce a car in Malaysia, compared to importing one.

Relating to electric vehicles, Wan Junaidi says that our weakness in formulating policies and guidelines are apparent.

"We have taken too long to approve rules regarding electric cars and motorcycles compared to other countries. For example, if one would visit Suzhou, China, a town with 4.5 million residents, 90% of them have electric motorcycles. There are no restrictions by legislations or policies stopping them from doing so," says Wan Junaidi.

He adds: "In Malaysia, we have certain policies that are still not adequate for us to adopt electric vehicles or new technologies in our automotive industry."