Govt open to foreign investors in local auto industry

Friday December 3, 2010

Star

KUALA LUMPUR: Strategies are being devised to open up the local automotive industry to foreign investments.
Transport Minister Datuk Seri Kong Cho Ha said this was in line with globalisation and liberalisation trends.
“The Government is devising appropriate strategies to open up the automotive industry while protecting local players and setting sustainable policies that allow fair competition among automakers,” he said in his keynote address at the 3rd Kuala Lumpur International Auto­motive Conference here yesterday.

Crowds looking at two Proton concept vehicles during a preview at the Kuala Lumpur International Motor Show 2010 at PWTC.

Kong said a liberalised industry and a level playing field would allow local and foreign players to map out future investment plans.

“Local players will be more competitive in line with the trend of market liberalisation and globalisation,” he added.

Kong said the Government was committed to tackling sensitive but economically vital issues, such as the potential gradual revision of fuel subsidies and inflationary control policies.

He urged the industry to expand through partnerships, mergers and acquisitions to become more competitive and achieve economies of scale and market dominance.

He said there was a shift in focus by major and established car makers, which were investing in emerging markets with large populations such as China, India and Indonesia, and striking up local alliances to expand their operations.

“This reflects a tremendous shift in their global market strategies which is in line with the growing economic and political power of the emerging market regions,” he said.

He said the Government hoped to create a conducive business environment that would enable auto industry players to flourish and find their share of the global market.

Kong said Malaysia could be considered a highly motorised country with 1.017 million new vehicles registered in 2009 alone.

The total number of registered vehicles on the road at the end of last year was 19.016 million and by the end of this year, it would be more than 20 million, he added.

On environmental sustainability, Kong said the Government was committed to promoting the manufacturing of fuel-efficient and alternative-energy vehicles to draw in more foreign investments.