Don’t just see Malaysia as place to sell cars, car brands must have effective localisation plan – MITI

Continuing his speech at the launch of the MCE Auto Hub in Serendah today, minister of investment, trade and industry (MITI) Johari Abdul Ghani doubled down on his ministry’s insistence that carmakers increase the localisation of their CKD locally assembled vehicles, saying that they should not see Malaysia as simply a place to sell their wares.

He added that beyond approving cars for sale, MITI is seeking foreign partners that can bring advanced technologies, global scale and specialised engineering that can “enrich our industrial base,” while also creating opportunities for technology transfer and deeper integration with local suppliers.

“Every time investors come to see me – especially in the automotive sector – asking for approvals [for their new cars], I always tell them, ‘This country is not a place only to sell cars. We want you to come and bring all the technologies, all the components, so that you can use Malaysia as a hub,'” Johari said.

The minister continued, saying that while he understands that no investment can bring 100% localisation, he still expects established players to incorporate “real and effective localisation” into a substantial portion of their local manufacturing. This, he says, is to support the vendors involved in the local supply chain and the workers they employ.

“Some of [the investors] ask me, “Datuk, we are here to bring in our cars, we want the government to give import duty, excise duty, sales tax [incentives].” I say, ‘If you want that [without localisation], then we didn’t need to build this ecosystem.’ We already have 730 companies that are involved in this supply chain. We have 700,000 [jobs] that we have created over the years. You just imagine, if everything comes from overseas, what’s going to happen on this 730 companies and 700,000 employees in this country?”

Johari said that it is critical for Malaysia to develop capabilities in design and engineering, software and electronics, battery technologies, ADAS and intelligent mobility solutions to continue supplying the automotive industry in the future. “It will take five years, it will take ten years, we don’t care why you have to start somewhere, and the government must be together with the industry player to work this strategy together for the future of this industry,” he added.

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