KUALA LUMPUR, Oct 7 — Car manufacturers worldwide are reworking their strategy to hit up previously overlooked markets in Southeast Asia, including Malaysia, as demand ebbs elsewhere, Financial Times (FT) has reported.
Automotive giants in Europe and the US are joining Japanese carmakers such as Honda, Nissan, and Toyota in rolling out low-cost and energy-efficient models, spearheading the race to capture the market with increasing average incomes and aspirations, the financial newspaper noted.
“The Asean nations such as Indonesia, Malaysia and Thailand form one of the regional ‘clusters’ that we believe should be on the growth list of every (carmaker) and supplier,” Xavier Mosquet, managing directory at the Boston Consulting Group in Detroit was quoted saying, referring to the Association of Southeast Asian Nations by its acronym.
“For players in Europe, the US, and Japan, geographic diversification has never mattered more than it does today in order to balance local economic storms.”
According to the most recent World Bank data in 2010, Malaysia has an average car ownership of 361 cars per 1,000 of its population, the highest in Southeast Asia.
It is a markedly different situation from 20 years ago, when international marques such as General Motors and Volkswagen were trying to enter emerging markets such as China and India, FT reported.
According to the London-based daily, those brands are playing catch up with Japanese brands and other Asia-focused brands which have done the early running in the Southeast Asian markets.
“With the BRICS becoming crowded with both global and local players, many global automakers are now looking to tap white space in what up to now have been more marginal or volatile markets,” Ian Fletcher, senior analyst at IHS Automotive, a consultancy and forecaster, was quoted saying.
BRICS is the acronym for the five major emerging national economies: Brazil, Russia, India, China and South Africa.
Unlike in Indonesia and Myanmar where carmakers are rolling out ultra-cheap models to capitalise on their low car ownership, the brands are trying to grow in Malaysia through energy-efficient vehicles (EEV).
Malaysia is also expected to revise for the third time its National Automotive Policy (NAP) by year end, which will see Southeast Asia’s third largest economy turned into a hub for EEV production, by attracting foreign original equipment manufacturers (OEM) that are looking to enter the bigger Asean market.
Ministry of International Trade and Industry (MITI) secretary-general, Datuk Rebecca Sta Maria, had confirmed last month that discussions are still going on at the ministerial level.
“The latest review comes with loads of expectations, like the promotion of EEV,” Sta Maria had told reporters then.
MITI was reported in August to be screening EEV manufacturing licence applications from European, American and Japanese brands, while a roadmap to develop the infrastructure of electric vehicles will also be released by the Ministry of Energy, Green Technology and Water.
Among others, Japanese marque Honda is expected to invest in Malaysia’s EEV segment, after it has divested its operations in Thailand.
“It realised that Malaysia offers the whole spectrum to support the development of EEV like the hybrid, diesel and petrol vehicles. Thailand, for example, offers only an eco-car policy by way of incentives for the 1.2-litre diesel and 1.4-litre petrol vehicles,” Malaysia Automotive Institute (MAI) CEO Madani Sahari told financial daily Business Times.
After it was introduced on March 22, 2006, the NAP has since gone two revisions: the first in 2009 and the second in 2012.
