The Malaysian government has just announced the development of the third domestic car line, after two projects have been carried out earlier as Proton and Perodua car production projects.
According to the Minister of International Trade and the Malaysian industry Darell Leiking, the new project entirely by private funding, the government can only partially support tax and research grants.
The goal of the project is to apply science, technology, engineering and ensure that the third-party car is fully developed in Malaysia.
DreamEDGE, a company based in the city of Cyberjaya in the Selangor state, was selected as the main project implementation. Meanwhile, the Japanese automobile manufacturer Daihatsu is an advanced technology support partner for the project. It is expected that Malaysia’s third domestic car prototype will be shipped in 3-2020 and the first launch can take place 1 year later.
The automotive industry is one of the most important manufacturing industries in Malaysia. This is the sector that contributes to accelerating the country’s development of the country.
The announcement of the new project showed a determination to promote the development of the domestic automobile industry by Malaysian Prime Minister Mahathir Mohamad after returning to power in 2018. Although he received much consensus, the project also stumbled upon criticism and concern from domestic commentary.
The reason is that the Malaysian car market is changing rapidly. The domestic car line abandoned the vehicle segment for foreign companies, while the rich in Malaysia was growing dizziness.
In addition, the Malaysian Government had to pour billions of ringgit to save Proton Holdings, Malaysia’s first national car carrier, one of the most marked projects under Mr. Mahathir Mohamad as the first Prime Minister (1981-2003) to have stumbled upon many objections.
In the most glorious period, the Proton’s market share peaked at 74% in 1993. However, the Proton’s revenues declined after the Asian financial crisis from 1998, causing Malaysia’s automobile dream to become unfinished.
The design style is outdated, the line backward, not standard safety, so it is not possible to export to the difficult markets that cause Proton to descend. In addition, the Proton is also subject to the competition from Perodua, the automobile company that was born in 1993 and the product line from abroad.
Despite receiving grants, the first automobile brand of Southeast Asia continues to have serious financial troubles. The Proton had to sell half the stake to the Chinese company Geely to keep the factories open and develop new models. Former prime minister Mahathir used to protest against this purchase, as he was not merely a car automobile, but a Malaysian automobile industry.
According to economic experts, lessons from the Proton show that developing the development of a domestic car line in Malaysia is not easy. Automobile manufacturing industry needs to invest large capital, from the cost of building factories, procurement, installation of machinery, hiring workers to invest in research and development. If you are aiming for domestic market only, the new national automobile needs to create a breakthrough in design and production.