Automotive industry in Malaysia: an assessment of its development

Abstract

This paper explains the evolution and assesses the development of the Malaysian automotive industry within the premise of infant industry and trade protection framework as well as extended arguments of infant industry using a global value chain perspective. The Malaysian automotive industry expanded in terms of sales, production, employment and local content, but failed in industrial upgrading and international competitiveness. The failures can be attributed to (a) lack of political promotion for high challenge-high support environment, (b) low technological and marketing capabilities and (c) limited participation in the global value chain. Although the Malaysian infant industry protection policy comprised many promising initiatives, the national and the overall domestic automobile industry ended up as a captive of the regionalised Japanese keiretsu system in automobile manufacturing. A new transformation is required to push the industry beyond its current performance through a more strategic productive coalition with multiple stakeholders including trade unions.

The Relationship between Macroeconomic Variables and Passenger Vehicle Sales in Malaysia

“…In addition, the number of employment in the automotive sector has also nearly doubled in a decade from 2000to 2009. (NPC, 2009Wad and Govindaraju, 2011). During the economic crisis in the United States in 2008, the Malaysian government has established the Automotive Development Fund totaling to RM200 million to consolidate and rationalize the PROTON vendor system for the purpose of promoting exports and financing the easy loan scheme to vendors.…”

Employee Engagement and Retention in Automotive Industry in Malaysian Context. Job Stress as a Moderator

“…The policy aims to promote Malaysian to be capable to build national cars and reduce the imports from other countries. In 1985, the first national car company, Proton has started operation and the production of first national car "Proton Saga" whereas in 1994, the second national car company Perodua was founded [3]. National Automotive Policy (NAP) was established in 2006 by the government to eliminate competition.…”

“…Malaysia also ranked ninth in the world, with the greatest number of automobile production with 511,165, as of July 2018 [2]. However, as claimed by [3] automotive industry in Malaysia is lack of marketing capability and weak in technological due to failure in industrial upgrading and global competitiveness. For instance, weak product development and marketing capacity of Proton failed to meet customers" satisfaction [4].…”

Trade Policy Review – Malaysia 2010

“…However, the indirect trade regime reigning in Malaysia must at the same time be classified as modestly to fairly discriminatory – if we focus on other policies that indirectly affect trade and drive a wedge between domestic and international prices (Menon, 2000; Woo, 2009). A number of such policies are in place today, the most obvious being those that affect different segments of the market for housing and cars (Malpezzi and Mayo, 1997, WTO, 2010a; Wad and Govindaraju, 2011). Indirectly a number of other markets are under similar influence such as the capital market because of the rebates or give‐away shares offered to ethnic Malaysians (Woo, 2009).…”