Thursday, 25 January 2018

AUTOMOTIVE POLICY – Consistency vital for industry continuity

Last week, the International Trade and Industry Minister, Dato’ Sri Mustapa Mohamed announced the performance of the automotive industry for the year ending last year. The announcement was made in view of a holistic performance, in line with the government’s aspirations in making the sector a key driver for Malaysia’s industrialisation.
The penetration of energy-efficient-vehicles increased for the fourth consecutive year, breaching the 300,000 production mark for the first time  its introduction, through the National Automotive Policy 2014 (NAP2014).
Exports of automotive parts and components are expected to meet its RM12 billion target, as third-quarter 2017 figures stood at RM9.3 billion. Exports of remanufactured components stood at RM516.4 million as at November, surpassing that of 2016. Despite the decline in the number of completely-build-up units (CBU’s) exported, the year-to-date value loomed close to 2016 figures, at RM944.2 million as at November 2017.
Furthermore, RM3.99 billion in investments commitment has been pledged by the industry for this year to 2022, in addition to the RM7.6 billion worth of investments realised last year.
Careers in the automotive industry are the biggest gainers, especially for skilled employment. Last year, 27,175 new jobs were created in the sector, 31 per cent of which comprised skilled and highly skilled employment. The industry also saw 1,252 graduates from Malaysia Automotive Institute’s lifelong learning upskilling programs.
Although domestic sales have taken a minor stumble in the past two years, it is important to look beyond those numbers and analysed the growth of the automotive industry holistically. While sales are important for the industry sustainability, it should not be the only yardstick.
Continuous growth cannot happen overnight. It requires consistent improvements, reviews, analysis and innovation. Such consistency must come from all key players. Government policy, industry commitment and consumer buy-ins must align with one goal – competitiveness.
As we inch closer towards a global competitive ecosystem, the benefits are optimised and well-balanced. The industry thrives within a consistent industry framework, and consumers benefit from a consistent supply of choices and an ecosystem that forces market balance through the principles of demand and supply.
For the last four years since the NAP2014 was launched, the philosophy was straight forward – moving towards gradual liberalisation of the industry, but in reaching those goals, the industry must be shaped to be ready and consumers must be aware of such goals.
With that in mind, NAP 2014 will be reviewed this year, taking into account new trends and changes that we must adapt to based on our observations of global markets over the last few years.
One of the important global trends is the remodelling of the concept of future mobility. It is important that the industry grasps the entirety of this lifestyle construct.
The NAP 2014 review is currently in progress, and we are working closely with the relevant industries and authorities to ensure that it will be is in line with national economic agendas and matches industry aspirations.
The current automotive policies have not only broadened the overview of the industry, but have also moved businesses and careers ahead as planned.
While setbacks are a natural part of progress, the important take away is that a consistent philosophy of competitiveness has necessitated the industry’s resilience and holistic growth.
This central philosophy has been a key feature of the nation’s administration for most of the decade. The progressive thinking towards gradual liberalisation - albeit with resistance - has created greater economic resilience in uncertain times and will have the power to maximize opportunities in better times.
To move forward, stability and consistency in economic policies is something we deserve.
“The strength of the tree lies not in the beauty of its fruits or flowers, but the resilience of its roots.”

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