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Strategic Analysis of Passenger Vehicle Market in Malaysia
Frost & Sullivan, June 2011, Pages: 144
This research service covers in detail the passenger vehicle market in Malaysia. It covers Malaysia's macro economic indicators and demographic overview, mobility trends, market drivers and restraints, structure of Malaysia Automotive industry, automotive cluster in Malaysia that includes OEMs, tier1, tier2 suppliers. This research service also includes in detail Automotive recap 2009, automotive market outlook, OEM and supplier profiles, price positioning of different segment vehicles and their volume sales in 2009. Malaysia macro economic indicators include population, GDP growth, interest rates, exchange rates, population indicators.
Research Overview
This Frost & Sullivan research service titled Strategic Analysis of Passenger Vehicle Market in Malaysia provides an in-depth analysis of the market drivers and restraints, industry trends, and competitive environment in addition to the challenges and issues faced by market participants. The study also provides macro economic indicators, automotive industry and supply chain overview, national automotive policy and aspirations, automotive recap 2010, market performance analysis, and profiles of key OEMs and suppliers.
Market Overview
Government Initiatives Provide a Shot of Adrenalin for the Passenger Vehicle Market in Malaysia
The passenger vehicle market in Malaysia is poised for steady growth as liberal policies unleashed by the government to boost the automotive industry have encouraged foreign participants to set up production bases in the country. The Malaysian automotive industry is expected to see partial and full liberalization by 2015 and 2020 respectively. Consumers will benefit from this healthy competition as it will help reduce prices, enhance quality, and offer a wide array of choices. Asian, European, and Chinese car makers are keen to assemble and manufacture cars in Malaysia. “The Ministry of International Trade and Industry is currently reviewing the manufacturing license applications from these automakers,” notes the analyst of this research service. “This will utilize existing excess capacity, promote local production, and energize the local auto components industry.” Steady economic growth in the country bodes well for the market as demand levels scale up consequent to rising employment and income levels in the country.
The government’ has been avidly promoting green vehicles, such as hybrids and electric vehicles (EVs). This is reflected by the exemption of import and excise duties for hybrid vehicles under 2.0 L announced in October 2010. Moving forward, the development of EVs in terms of technology and infrastructure will be spearheaded by the Malaysian Green Technology Corporation under the Ministry of Energy, Green Technology and Water; with active collaboration from the Malaysian Automotive Institute (MAI) and Proton.
Malaysian Automakers Must Shift from a Local Centric to an Export Oriented Posture to Obtain Business Traction
Malaysia has a competitive edge in terms of lower labour costs; however, the production costs are still not competitive, owing to the low production volume and scale. The automotive industry is a capital intensive industry where substantial amount of investments are needed for tooling and machinery. Without scale, per piece cost will remain high and uncompetitive to match with global standards. The Malaysian automotive industry is primarily driven by local domestic demand and consumption. Vehicles been assembled in Malaysia are predominantly to cater for local market. Likewise, auto components production in Malaysia by local manufacturers is mainly for the consumption of national carmakers namely Proton and Perodua. Without expanding the export portfolio, the market will remain stagnant. Key Industry stakeholders believe that by increasing exports, these issues can be resolved making the industry globally competitive.
The Malaysian auto industry has grown past the stage of localization and complete knock-down (CKD) assembly. The next stage will be to have indigenous R&D and technology to be developed locally. “To be globally relevant, local industry participants need to ramp up in-house R&D capabilities and upscale technology, processes, and products,” says the analyst. “Product range also needs to be diversified in order to better serve evolving customer needs.”
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