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Third national car can put Malaysia at forefront

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The third national car project provides an opportunity for Malaysia-based companies to be at the forefront of the global automotive industry evolution, according to industry watchers. — Reuters photo

KUALA LUMPUR: The third national car project provides an opportunity for Malaysia-based companies to be at the forefront of the global automotive industry evolution, according to industry watchers.

Frost and Sullivan senior vice president and Malaysia managing director Hazmi Yusof said cars were fast evolving in the developed markets to become part of a mobility platform with batteries, sensors and communication technologies breaking down the vertical boundaries and the younger generation was having a different attitude towards mobility, car ownership and brands.

“These and other factors are disrupting the traditional value chain of the automotive sector.

“Hence the new national car project provides the opportunity for Malaysia-based companies to participate and position themselves in the front-row seats of this change,” he told Bernama.

He said global automotive had been a fast-evolving industry in the last five years, underpinned by the usage of technology coupled with new business models to disrupt the status quo.

“This disruption creates opportunities for new entrants such as Tesla (in the United States) and BYD (in China) to successfully establish themselves.

“If we are able to identify and ride on these changes, then it would elevate Malaysia’s automotive industry,” he said.

Hazmi said with the government setting up an aggressive but possible timeline of two years to launch the car, the country needed to find the right partner and create the right ecosystem to achieve the target.

He added that the project was also expected to be a positive influence for other existing industry players to embrace Industry 4.0 technology.

Automotive analyst and Motorme.my editor Yamin Vong said the world’s automotive industry was undergoing a rapid change that could render conventional solutions as obsolete and standalone carmakers would find it tough to survive.

He said this change could be reflected by things that had never happened before such as bitter rivals Mercedes-Benz and BMW working together to combine their car-sharing, ride-hailing and electric charging points.

“Whether it’s a first, second or third national car, the private sector should be left to take the risk and let the fittest survive.

“The government should enable the automotive industry by providing incentives and infrastructure across the board rather than choosing champions,” he said.

He is also optimistic that an electric vehicle could be the third national car if it got the backing from the government.

“It wouldn’t be impossible for a technology-rich company to start an electric vehicle business in Malaysia,” he noted.

Asked on the export opportunities for the third national car, Vong said realistically, the car needed to be competitive in the domestic market to have a better probability of success in the export market.

However, he said, if the project managed to elevate the automotive industry in Malaysia to grow beyond its current import substitution and start to export to a significant volume, it would enhance local vendors’ capabilities to become world class.

Another analyst, who prefers to remain anonymous, said the third national car was expected to bring in new technology that could benefit the industry’s workforce.

“As new technology comes in, so will the skills to operate them; and given that high automation is needed, jobs will be created only be for highly-skilled workers,” he said.

While the project would drive a new phase of technological advancement, it was not expected to spur the total industry volume higher, he pointed out.

“Given the saturated market, most of the carmakers are venturing out into the export market as indicated by the Proton-Geely partnership to make Malaysia a right hand-drive regional hub.

“(Therefore,) a new phase in terms of technological advancement is all right, (but) not volume-driven launches,” he added. — Bernama