The beginning of Malaysia’s automotive industry predates its independence when Ford Malaya was incorporated in 1926 in Singapore as regional distributor of Ford products. Malaysia’s modern day automotive industry began in 1967 when Volvo Cars established an assembly plant in Shah Alam, Selangor. In 1984, PROTON was set up as a national car project to spur industrialization. Perodua was later established in 1992 to assemble mini and supermini cars.
The automotive industry plays a significant role in transforming Malaysia from an agricultural to industrial nation, which translates to high-value economic activities, improved standard of living as well as higher-paying jobs. As the sector continues to advance, more high-value jobs will be available and these include production engineers, robotics technicians as well product, process and tool designers. The sector employs thousands of Malaysians in both manufacturing and aftersales sectors and creates an important impact on the development of upstream industries, such as steel and chemicals, as well as downstream industries, including IT and maintenance services.
The National Automotive Policy (NAP) was first introduced in 2006 under the Third Industrial Masterplan (IMP3) 2006-2020 to facilitate the integration of the local automotive industry to regional and global levels. In 2009, the policy was reviewed to focus on enhancing the capabilities of the domestic automotive industry and create a more conducive environment for investments.
A second revision in 2014, named NAP 2014 placed emphasis on green initiatives, market expansion, thorough enhancement of the entire automotive ecosystem and development of technology, human capital and supply chain. The ultimate objective of the NAP 2014 is to establish Malaysia as a regional Energy Efficient Vehicles (EEV) hub by the year 2020. The EEV policy streamlines efforts to create skilled human resources, spur investments, enhance technology and promote sustainable mobility, all of which are important to create a high-value economy.
The local automotive industry has shown a healthy growth, with Proton and Perodua, both homegrown brands, capable of in-house design. Proton has also elevated itself to be among the few full-fledged automotive manufacturers in the ASEAN region. Proton and Perodua’s endeavors, as well as increased investments from other car makers, have resulted in a strong automotive ecosystem consisting of more than 25 vehicle manufacturers and assemblers, 600 local vendors and 50,000 aftermarket establishments, sustaining more than 600,000 jobs.