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Daily Express
01-07-2025
- Automotive
- Daily Express
Perodua in the frame to make Malaysia's best selling EV
Published on: Tuesday, July 01, 2025 Published on: Tue, Jul 01, 2025 By: Yamin Vong, FMT Text Size: MALAYSIA's motor industry has been a cornerstone of the nation's industrial ambitions since Volvo and Tan Chong-Datusn started their local assembly plants in the 1960s. National car makers Proton and Perodua came on the scene in the 1980s and 1990s, and a National Automotive Policy came into being in 2006. However, the sudden rise of China's car industry as a global powerhouse has necessitated an overhaul of strategies. The government set up a council of automotive eminent persons with the critical task of charting a viable path forward to recognise world trade disruptions and recent geo-political tensions. The council is expected to present its findings by August, marking a significant moment in Malaysia's industrial evolution, as indicated by Tengku Zafrul Aziz, the investment, trade and industry minister, It must, however, be noted that the council's mission could be strengthened if the finance minister was the co-chair. Otherwise, how could the council reasonably expect its suggestions on incentives and tax policies to be not whittled down by the Treasury? Change of vision The automotive industry in Malaysia began with the vision of transitioning from a commodities economy to a modern, high-value manufacturing economy. Over time, however, this vision has shifted. The sector is increasingly seen as a source of tax revenue, rather than solely a driver of industrial progress, as pointed out by FMT columnist Rosli Khan. This change is particularly evident in the impending implementation of a new excise duty on locally assembled cars based on their open market value. Starting Jan 1, this excise duty will add approximately RM500 to the price of entry-level Perodua models and up to RM30,000 for entry-level premium German cars. Initially postponed in 2020 due to the Covid-19 pandemic, its enactment may possibly reshape the automotive landscape. With locally-assembled premium cars becoming almost as costly as their CBU (completely built-up) counterparts, the premium car marques may abandon local assembly altogether and opt to import built-up cars assembled in Thailand. This potential shift poses significant challenges for the industry, requiring the eminent persons council to address key concerns surrounding competitiveness, tax policy, and industrial sustainability. Investment incentives A second factor enriching the council's deliberations is Malaysia's approach to attracting foreign direct investment in the automotive sector. Last year, menu-driven incentives were introduced, to attract global car companies. While the initiative represents progress over the opaque customised incentives it replaces, industry participants have noted that these incentives are less favourable compared to those already offered to low-volume manufacturers. For Malaysia to remain competitive, the council must explore strategies to refine and optimise these incentives to attract some of the biggest Chinese car companies which are not already heavily invested in Thailand and Indonesia. Despite these challenges, optimism remains. The global automotive industry can be reasonably expected to remain powered by three complementary drivelines — internal combustion engines, battery electric vehicles, and hybrids, including plug-in hybrids and range-extenders — well into 2050. This provides Malaysia with a few options in terms of being a regional hub in the automotive supply chain. Electronics and rare earths One strategic opportunity lies in the conversion of ADAS software from left-hand drive to right-hand drive vehicles. According to Chinese industry sources, this process is significantly more complex than simply shifting the steering wheel and controls. By incentivising Malaysia's electrical and electronics industry to expand further into automotive electronics, the country could become a hub for specialised research and development as well as automotive chips. Additionally, Malaysia's rare earth resources offer a promising avenue for growth. By consolidating these resources and promoting the manufacturing of super magnets and electric motors, Malaysia can position itself as an integral player in the global electric vehicle supply chain. Sustaining the energy transition Finally, to ensure Malaysia fulfils its commitments under the Paris agreement on climate change, the government should consider implementing an end-of-life vehicle system or cash-for-clunkers programme. Such initiatives would boost the energy transition by encouraging the replacement of older, less efficient cars with newer, greener alternatives. Since the major Chinese companies BYD, GWM, SAIC-MG are already invested in Thailand as their regional hub, Malaysia's fortunes as a car exporter will probably lie with Perodua, Proton, Chery and possibly Changan. Perodua's role Of these four, I would wager that Perodua offers the best hopes for Malaysia to reduce its severe trade deficit in cars assuming that its Japanese partners permit export sales. When Perodua as a national car maker was tasked by the government to make an EV, its technical partner and shareholder Daihatsu, which had little EV technology, gave permission to Perodua to integrate components and make its own EV. Allowed this latitude, Perodua has put in the R&D to integrate off-the-shelf electric motors, high-voltage battery pack and electrical control systems and launch the EV for sale later this year. And who knows, with the Myvi being Malaysia's best selling car for several years consecutively, Perodua's EV might well be Malaysia's best selling EV, if not Asean's best selling EV. # The views expressed are those of the writer and do not necessarily reflect those of FMT.
Daily Express
12-06-2025
- Automotive
- Daily Express
Now's as good a time as any to buy China-made cars
Published on: Thursday, June 12, 2025 Published on: Thu, Jun 12, 2025 By: Yamin Vong, FMT Text Size: BYD, for instance, has emerged as a leader in EVs and is iconic for its integrated supply chain, which includes battery production, rare earth supplies and its own record-setting 7,000 car capacity ocean-going car carriers. - FMT pic for illustration only. Now is a good time for people in Malaysia and Southeast Asia to buy Chinese cars. They offer good value for money, being about 30% cheaper than equivalent legacy car models, and are packed with features previously only offered in cars from premium brands that cost twice as much. However, the main disadvantage of Chinese cars is that they lack the legacy enjoyed by the 150-year old Mercedes Benz or Peugeot, or even the 118-year old Toyoda loom company which preceded the 88 year-old Toyota Motor Corporation. Advertisement To overcome that fear of the unknown, Chinese car makers who began global exports only about 10 years ago started with gimmicky but nevertheless mind-boggling vehicle warranties, such as a million kilometres for their internal combustion engines. While that phase is over, many Chinese EV makers still offer an outstanding eight-year 160,000km powertrain warranty covering electric motors, inverter and related drivetrain components to emphasise confidence in their core EV technology. Coming back to my main point, it's very simple. Malaysian and Southeast Asian car buyers are benefiting from China's industrial policy, which includes broad infrastructural subsidies for the car industry from the central government. On another level, many provincial governments in China compete in car manufacturing output to gain brownie points with the central administration. They provide incentives to the respective companies, such as export sales subsidies. It's understood that these export sales incentives can reach as much as RMB14,000 (RM7,800) per car. But it's not just subsidies that make China's cars cheaper than their legacy counterparts. China's automotive industry has emerged as a global leader in technological advancement. As a benchmark, its use of robotics has outstripped legacy car firms, significantly influenced by government policies and subsidies. The country's strategic approach has enabled various manufacturers – from state-owned giants such as Shanghai Auto (SAIC) and Beijing Auto (BAIC) to privately-held enterprises like BYD, Geely, Chery, and GWM – to thrive in a competitive market. Central to the Chinese government's policies is the 'Made in China 2025' initiative, which aims to elevate domestic manufacturing, particularly in high-tech sectors, including automotive production. This initiative seeks to reduce reliance on foreign technology, ensuring that Chinese carmakers can innovate and compete domestically and internationally. Moreover, Beijing's policies have focused heavily on promoting EVs both to improve energy security as well as to reduce carbon emissions. Subsidies for EV manufacturers have been generous; for instance, substantial financial incentives are provided to consumers purchasing electric cars, which in turn propels sales and encourages manufacturers to invest in research and development. These measures have resulted in a dramatic increase in EV production, placing China at the forefront of the global market. State-owned firms like SAIC Motor and Dongfeng Motor benefit from government backing and preferential access to funding, enabling them to invest in large-scale production facilities and enhance their technological capabilities. These companies can navigate the complex regulatory environment more effectively than private firms due to their established connections and resources. On the other hand, private companies like BYD, Chery, and GWM have leveraged the supportive environment fostered by government policies to carve significant market share. BYD, for instance, has emerged as a leader in EVs and is iconic for its integrated supply chain, which includes battery production, rare earth supplies and its own record-setting 7,000 car capacity ocean-going car carriers. China also made an unprecedented concession for Tesla, the world's leading EV innovator, allowing it the distinction of being the only 100% foreign-owned company permitted to manufacture its cars in China. The objective was to galvanise domestic Chinese EV makers to improve their cars to world-class status in competing with Tesla. Beijing's alignment with sustainable development goals has facilitated Tesla's growth, with subsidies for EV purchases benefitting its sales. Additionally, the cooperation between Tesla and local suppliers has allowed it to optimise its supply chain while adhering to local regulations. As a result, the price of Tesla cars in Malaysia are the cheapest in the world, after Shanghai, where the Tesla Model Y is made. Note: I'm not one to refuse subsidies and, after some budgeting, I've bought my first Chinese car, an EV, for RM100,000. Out of the more than 50 cars that I've owned in my lifetime, this is only my second new car. The first was a Toyota Prius hybrid which I bought for RM100,000 12 years ago, when hybrid cars were duty-free. This hybrid is still a reliable daily runner and delivers super fuel efficiency. Now entering the era of electrification, I want to experience how this BEV, as a representative of China's EV industry, performs. Read this column for updates. # The views expressed are those of the writer and do not necessarily reflect those of FMT.
