Greater Kuala Lumpur Shifting Gears in Automotive Manufacturing and Innovation

Thank you to #TheEdge for publishing my Op-Ed Article in the Forum section, 6 November 2022

Amid rapid shifts in technology, consumer preferences and sustainability concerns, Malaysia is steadily revving its engines to become an influential player in the automotive industry. I previously shared about how the country’s journey towards sustainability has become integral to this transformation, with Greater Kuala Lumpur (Greater KL) leading the way.

The growing demand for sustainable transportation, particularly electric vehicles (EV), is presenting Malaysia with exciting opportunities for automation and automotive manufacturing. This not only means that Malaysia can explore new avenues in these industries but also positions the country as a significant contributor to the global drive for sustainability. Malaysia has made noteworthy strides in automotive manufacturing, previously limited to assembly and production.

Today, Malaysia is forging a path to become an EV powerhouse in the region, with the government vigorously promoting a conducive EV ecosystem.

The automotive industry in Malaysia is gaining attention from global players, as evidenced by recent partnerships and collaborations. Chinese automaker Chery’s decision to establish its production hub in ASEAN in partnership with Inokom is an astute move to strengthen exports to Thailand, Singapore, Brunei, Vietnam and Australia. Renowned US-based Tesla’s entry into the Malaysian market highlights the country’s importance in the regional automotive landscape. Industry leaders such as these recognise the benefits of leveraging Malaysia’s resources and strategic location to achieve sustainability.

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Harnessing EV Innovation to Unlock Potential

Global companies such as Volvo, Hyundai,[1] Geely and now Chery[2] are recognising Malaysia as a centre for innovation and research and development (R&D). This points to a critical aspect of Malaysia’s, and more specifically, Greater KL’s role - becoming the thinking epicentre for EV technology innovation. Our rich ecosystem of skilled workforce, state-of-the-art facilities, and progressive policies makes us an ideal ground for developing EV technology innovation.

With the EV industry gaining momentum across Southeast Asia, there is a race among countries to position themselves as regional hubs for EV production and innovation. Tesla selected Malaysia for its expansion plans, citing the government’s progressive policies and Malaysia’s importance in expanding the Asia Pacific infrastructure. Neighbouring countries such as Indonesia and Thailand are attracting automakers from Japan, South Korea and the US to establish factories. Similarly, Malaysia has initiated building EV charging infrastructure as the government rolls out policies to bolster the EV industry and curb carbon emissions.

Malaysia has set a target for EV adoption, aiming to reach 15% market share by 2030 and 38% by 2040[3]. The Malaysian Green Technology and Climate Change Corporation (MGTC)[4] is actively working on a strategic framework to plan and develop the EV infrastructure throughout Malaysia. In parallel, Proton, Malaysia’s prominent automotive company, has crafted its own EV Roadmap. Proton’s roadmap outlines a phased approach to vehicle electrification, starting with mild hybrid electric vehicles (MHEVs), progressing to plug-in hybrid electric vehicles (PHEVs), and culminating in battery electric vehicles (BEVs). Proton’s initiative is significant as it reflects the industry’s response and commitment to aligning with global trends and enhancing competitiveness.

The National Budget 2024[5] has put in measures to accelerate Malaysia’s automotive journey further. By allocating significant resources towards the development of the EV and automation industry, the government has displayed a clear vision for the future. Incentives for companies establishing manufacturing facilities, R&D centres and educational initiatives for upskilling the local workforce are at the forefront of this budget. Furthermore, the budget includes a comprehensive plan to develop the necessary charging infrastructure for EVs, creating an environment conducive to the adoption of electric mobility.

As MGTC continues to develop a broader national framework, Proton’s roadmap is an example of how industry players are taking steps to be part of the EV transformation. The national framework, support and incentives as outlined in the National Budget, and efforts by companies like Proton will be instrumental in shaping Malaysia’s EV landscape, helping it compete with neighbouring countries that are also vying for a leadership position in the evolving EV market.

Can We Keep Pace with the Race??????

However, amid the exciting developments, concerns arise about how fast and effectively these plans are being carried out. The execution of the strategies outlined in the National Budget 2024 must be efficient and aligned with the industry’s realities and the fast evolution of the industry. While tax exemptions and incentives are undoubtedly positive steps, the real challenge lies in implementing these provisions effectively. It is not just about having the right policies in place; it is also about how we translate them into realities. This requires robust monitoring, adaptive planning, and a strong feedback loop to refine the implementation process continually.

Greater KL stands at a crossroads. With a potentially strong foundation being laid by the EV Roadmap and New Industrial Master Plan (NIMP), the city’s success in the automotive industry hinges on swift execution, industry collaboration, and consumer readiness for EVs. If progress continues on a positive trajectory, we will be in an excellent position to infuse new ideas and high-value innovations to Malaysia’s automotive sector by tapping into the expertise of high-profile global players that have established themselves in Malaysia. This momentum could further stimulate the creation of more skilled jobs in Malaysia.

As Greater KL navigates this ambitious journey, it holds the promise of becoming not just a regional but a global powerhouse in automotive manufacturing and innovation. The stakes are high, and the time for action is now.

In a world marked by rapid technological shifts, changing consumer preferences, and a growing emphasis on sustainability, Malaysia is emerging as a pivotal player in the automotive industry. I share my views as we explore Malaysia's journey towards becoming a regional powerhouse in electric vehicle (EV) manufacturing, with a particular focus on the Greater Kuala Lumpur region. #TheHeartofARegionalHub #DigitalDiverseDynamic #Digital #Diverse #Dynamic #GreaterKL #KualaLumpur #Sustainability