Malaysia automotive sector performed well in 2019, hopes similar growth in 2020

2019 was a good year for Malaysia automotive sector as overall increase was recorded in performance on various areas from EEV penetration, parts and components (including remanufacturing) exports, human capital development, as well as domestic sales and production.

Officiating the event was YBhg. Dato’ Sri Norazman Ayob, Deputy Secretary General (Industry), Ministry of International Trade and Industry. YBhg. Dato’ Madani Sahari, CEO Malaysia Automotive, Robotics and IoT Institute (MARii). Let’s dive down what happened at the event:

Numbers showed positivity for automotive industry

1. The automotive industry’s holistic approach towards exports has contributed to newer heights, while the domestic production volume also increased. In summary:
   1. Overall, the export sector of the automotive industry recorded a total of RM15.45 billion in 2019 – a continuous year-on-year increase since 2014;
   2. Parts and components exports surpassed the record figure of RM12.1 billion in 2018, reaching a total of RM13.7 billion in 2019;
   3. Exports of remanufactured parts and components also recorded an increase to RM 722 million in 2019, a continuous growth year on year;
   4. Total Industry Volume (TIV) and Total Production Volume TPV) in 2019 increased to 604,287 units and 571,632 units, respectively; and
   5. The 2019 TPV to TIV ratio also increased to 95%, the highest recorded figure since 2014, signifying the industry’s capabilities to continuously meet consumer and industry demands through local assembly. 

2. Continuous increase of job creation in the manufacturing and aftermarket sectors, with a focused approach towards adoption of Industry 4.0 technologies for future development of the automotive industry in new areas such as Next Generation Vehicles (NxGVs) and Mobility-as-a-Service (MaaS). A total of 65,388 new jobs were created in 2019, in both the manufacturing and aftermarket sector.

3. Business productivity continued to improve in 2019, through the capacity building programmes organised by MARii:
   1. 423 parts and component suppliers have attained Supply Chain Level 3 with 63 companies attaining the highest rating of Level 5, capable of in-house product and process design – achieved through the participation in Lean Production System (LPS) programme and the Automotive Supplier Excellence Programme (ASEP).
   2. 66% of automotive suppliers and vendors in Malaysia have achieved Supply Chain Level 3 and above, signifying the capabilities of local automotive businesses.
   3. More than 1000 workshops and dealers enhanced their business operations through Workshop Transformation Programme (WTP) and Dealers Entrepreneurship Enhancement Programme (DEEP).

4. Interest towards Energy Efficient Vehicles (EEVs) increased drastically. In addition, public’s awareness on future mobility, energy efficiency and vehicle safety also increased in 2019:
   1. Energy Efficient Vehicles (EEV) penetration recorded an all-time high of 87.58%, signifying the public’s increasing interest and demands for futuristic powertrains, fuel savings, and carbon emission reduction.
   2. MARii’s flagship public engagement programmes such as the Malaysia Autoshow, Car Care Week and SafeCar, reached out to more than 600,000 people in 2019, a drastic improvement over 2018’s figure of 422,113.

2020 is time to head forward

Key measures to be executed in 2020 will be based on the National Automotive Policy 2020 (NAP 2020) which was launched recently to accelerate the development of NxGVs and MaaS in Malaysia, including the adoption of Industry 4.0 technologies.

As such, the Government will be developing an EV Interoperability Centre (EVIC). The EVIC will contain various facilities needed for the testing of NxGVs such as charging stations, smart grid integration solutions and various other infrastructures to accommodate the research and development phase of future mobility. The combination of various facilities in the EVIC will create an NxGV ecosystem based on these future technologies. 

An NxGV Test Bed is also in the works, which will allow all businesses in the mobility ecosystem to collectively design and validate their products in a single location, in collaboration with all members that contribute to the design pool for autonomous driving.

In addition to the enhancement of current talent and value chain programmes, the automotive stakeholders can also expect standards development in various areas such as

1. EEV;
2. EVIC;
3. NxGV;
4. Vehicle inspection – Vehicle Roadworthiness;
5. Vehicle inspection – Used Vehicle Evaluation;
6. Motor vehicle aftermarket – Service, Spare parts and Sales (3S); and
7. Motor vehicle aftermarket – Service, Spare parts, Sales and Smash Repair (4S).

As for the outlook in 2020, it was forecasted that the industry will continue to grow in terms of TPV and TIV in 2020 to reach nearly 578,000 units and 610,000 units, respectively.  There will also be a continued increase in terms of EEV penetration, at 90%. In terms of exports of parts and components (including remanufacturing), the value is expected to contribute RM16 billion.

Looks like Malaysia is expecting the automotive continued it’s bullish run for 2020. Any changes you hope that various government agency should perform? Let us know in the comment