Adapting to global economic shifts to enhance exports
Within the span of half a year, we have seen major shifts within the regional and global economies, which affect Malaysia both directly and indirectly.
The most recent being Brexit – in which the British people voted in a referendum to exit from the European Union.
At the same time, the Trans Pacific Partnership (TPP) agreement and the formation of the Asean Economic Community (AEC) created a need for significant changes in the way in which Malaysian companies conduct businesses.
The world also saw numerous economic issues raised during the latest round of the World Economic Forum, including climate change, economic and social inclusion, sustainable development and the Fourth Industrial Revolution.
Although it is too soon to predict the impact of Brexit, some reports suggest that the post-Brexit era will see more direct engagement between the UK and the world’s economic powerhouses, such as the United States, China, India, Japan, Australia and Canada.
Coincidentally, these countries also cross economic paths with Malaysia, as many of them are signatories to the TPP, providing Malaysian businesses with numerous opportunities from these string of events.
Economic shifts, events and policy changes will always create impacts on the business ecosystem, be it the automotive sector or otherwise. Naturally, there will be more discussion on the negative impacts, as the fear of the uncertain tends to create discomfort.
However, we should also be aware than any shift will also have a positive impact, and there is a need to analyse and take advantage of it in order to remain competitive.
It is, therefore, important for Malaysian businesses to keep abreast with global economic shifts, with global scenario planning and internal development carried out with the ever-changing global economy in mind. At the heart of this global drive is the emphasis on capability and capacity enhancement to achieve global competitiveness and export readiness.
Since the National Automotive Policy 2014 was announced, Malaysia's automotive sector has been vigorously preparing itself for global competitiveness.
The gradual liberalisation of the automotive sector has created an unprecedented level of choice for the consumers, while the automotive supply chain has seen tremendous development in the areas of production efficiency, technology acquisition and human capital development.
To date, we have seen more than RM11 billion and RM2.6 billion in investment for the manufacturing sector and after sales sector, respectively. Around 60,000 people have also been recruited into the automotive industry over the last two years.
Malaysia Automotive Institute's Automotive Components Export Enhancement Programme (PEKA), developed with Malaysia External Trade Development Corporation, further enhances the export capabilities of component manufactures.
PEKA assists manufacturers in identifying potential export markets and bridge relations gaps between local vendors and the vast global automotive market.
Barriers to exports are also addressed through Distribution Infrastructure Networks, to be set up collaboratively by the government and the industry to further enhance export activities.
Despite these developments, sound business planning and foresight is still required. At the end of the day, it is important for these business entities to analyse and smartly react to global economic shifts to maximise all positive outcomes.
“Luck is merely a matter of preparation meeting opportunity.”