The Development of the Automobile Industry and the Road Ahead
© 2004 Department of Statistics Malaysia
The Development of the Automobile Industry and the
Road Ahead
Mohd. Uzir Mahidin and R. Kanageswary
Abstract
This paper discusses the development of the automobile industry in
Malaysia in terms of production and sales of motor vehicles. The
Malaysian Automotive Policy has been the key impetus for the development of automobile industry leading to the dominance of the national car in the ASEAN motor vehicle market since 1998.
However in 2003, Malaysia fell to second place after Thailand in the motor vehicle market of ASEAN. Therefore, a comparative study is undertaken to asses the development of automobile industry of both
Malaysia and Thailand.
The development of the automobile industry in Malaysia
In the 1960s, the Malaysian government encouraged the setting up of automobile assembly plants in Malaysia. The main objectives were to reduce the imports of completely built-up units (CBU) that will help to stabilize balance of payments, to create employment and to provide the base for transfer of technology. In the 1970s, the “Local Content
Policy” was promoted to enhance the development of local parts and components industry.
The historical moment for the automobile industry was in 1985 when the first national car, Proton Saga, made its debut.
Proton’s entry into the local automobile industry has restructured the industry from an assembly phase to manufacturing phase. In 1994, the second national car,
Perodua Kancil made its debut.
The implementation of the national car projects was a step towards the development of an integrated motor vehicle
Mohd. Uzir Mahidin and R. Kanageswary
2
industry. The projects have contributed to the growth of the local component industry, as attested by the presence of 350 component manufacturers in Malaysia, of which 234 are
Proton vendors and 135 are Perodua vendors. The national car projects had also attracted new car manufacturers to set up their
The Development of the Automobile Industry and the
Road Ahead
Mohd. Uzir Mahidin and R. Kanageswary
Abstract
This paper discusses the development of the automobile industry in
Malaysia in terms of production and sales of motor vehicles. The
Malaysian Automotive Policy has been the key impetus for the development of automobile industry leading to the dominance of the national car in the ASEAN motor vehicle market since 1998.
However in 2003, Malaysia fell to second place after Thailand in the motor vehicle market of ASEAN. Therefore, a comparative study is undertaken to asses the development of automobile industry of both
Malaysia and Thailand.
The development of the automobile industry in Malaysia
In the 1960s, the Malaysian government encouraged the setting up of automobile assembly plants in Malaysia. The main objectives were to reduce the imports of completely built-up units (CBU) that will help to stabilize balance of payments, to create employment and to provide the base for transfer of technology. In the 1970s, the “Local Content
Policy” was promoted to enhance the development of local parts and components industry.
The historical moment for the automobile industry was in 1985 when the first national car, Proton Saga, made its debut.
Proton’s entry into the local automobile industry has restructured the industry from an assembly phase to manufacturing phase. In 1994, the second national car,
Perodua Kancil made its debut.
The implementation of the national car projects was a step towards the development of an integrated motor vehicle
Mohd. Uzir Mahidin and R. Kanageswary
2
industry. The projects have contributed to the growth of the local component industry, as attested by the presence of 350 component manufacturers in Malaysia, of which 234 are
Proton vendors and 135 are Perodua vendors. The national car projects had also attracted new car manufacturers to set up their