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Malaysian market ‘wide open’ for parts makers

More SUVs: Part of the Great Wall Haval SUV range could be coming to join the booming Australian segment with, the H6 currently under consideration.

Victorian government embeds car execs to take advantage of Malaysian industry growth

General News logo19 Aug 2014

By IAN PORTER

THE Malaysian automotive industry is “wide open” for Australian parts-makers looking to find contracts offshore following the introduction of the country’s new automotive industry plan, according to a senior AutoCRC executive.

Director of the Automotive Supplier Excellence Australia (ASEA) division of AutoCRC, Linsey Siede, said this week that the liberalised rules in the new Malaysian National Automotive Plan mean there will be new manufacturers entering the Malaysian market alongside the current eight manufacturers.

The AutoCRC, which has a collaboration agreement with the Malaysian Automotive Institute (MAI), a government authority, has already started several joint research projects with Malaysian companies.

Mr Siede was speaking to GoAuto after being appointed as one of two in-market advocates who will work in Malaysia to seek out opportunities for Victorian parts-makers to not only do research but also to participate in the Malaysian supply chain.

The plan, revealed by Victorian minister for manufacturing David Hodgett last week, is to embed Victorian executives inside the MAI, which has close relations with the eight car manufacturers already operating in Malaysia.

“This important project is a joint Malaysia and Victorian Coalition government initiative designed to proactively assist Victorian and Malaysian automotive supply chain businesses to identify new business opportunities,” Mr Hodgett said.

“The project builds on the AutoCRC‘s strong understanding of the Malaysian automotive industry through its existing engagement with the MAI and Malaysian original equipment manufacturers.”

Under the scheme, Mr Siede and ASEA program manager Peter Taylor will act as in-market advocates for Victorian parts-makers, seeking opportunities and arranging introductions between companies.

Mr Siede said the Malaysian government had, in April this year, issued the first new manufacturing licence in some years to the Malaysian company Go Automobile Manufacturing and its joint-venture partner Great Wall.

The partners are planning to make the 1.5 litre Haval M4 and the 2.0 litre Haval H6 SUVs, with the latter under consideration for sale in Australia. Local content is expected to hit 85 per cent by 2018.

“They want to make 100,000 vehicles a year by 2018,” Mr Siede said. “That is just one of the opportunities that are coming up that’s in the public domain.

“There are a number of significant opportunities around the same size as that coming up in the next few years, so there are some really, really good opportunities for Australian suppliers to get in on the ground floor.

“The Malaysian government has thrown the doors wide open for the Australian supply chain. They are asking us to come and have a look at the opportunities, with open arms.”

Mr Siede said that obtaining supply contracts with a new manufacturer would be the best sort of opportunity, although Malaysian manufacturers still use a lot of locally made parts.

The Malaysian companies DRB-Hicom (Proton) and Perodua hold around 50 per cent of the market, while Japanese manufacturers including Toyota, Honda, Mitsubishi and Nissan are also present.

The supply chain is estimated to be about 40 per cent owned by Malaysian companies, while another 40 per cent come from joint ventures. The last 20 per cent are foreign owned parts-makers.

The Malaysian minister for international trade and industry, Dato’ Mustapa bin Mohamed, said the new in-market advocacy position was well timed to co-ordinate with the start of the 2014 Malaysia National Automotive Plan.

“Victorian automotive suppliers are well positioned to partner with the Malaysian automotive industry given Victoria’s strong capabilities in automotive R&D, engineering and manufacturing,” he said.

“Victoria already has a long-standing relationship with the Malaysian automotive industry through several Victorian automotive businesses including PolyPacific, MtM, Hella and the AutoCRC, and this initiative will build on these successes.”

Minister Hodgett said Mr Siede and Mr Taylor would divide their time between Malaysia and Australia under the project, which will help the Malaysian automotive industry increase its technical capabilities and export profile.

“It will also give Victorian automotive suppliers an opportunity to access the rapidly growing Malaysian and South-East Asian automotive industry, which is expected to expand dramatically from the current three million vehicles to five million vehicles in 2017.”

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