• Madani Sahari

Automotive industry likely to see holistic growth this year

Malaysia's automotive sector is set to be an exciting year in 2016, after a stable performance in 2015. Although the appreciation of the USD resulted in consumers being more cautious in their car purchases, it is interesting that the GST implementation impacted the industry somewhat positively, as OEMs either reduced or maintained their prices from April onwards.

The automotive industry is expected to see a more competitive environment next year, as new investments under the NAP 2014 set in, resulting in not just a higher production volume, but added local value to the automotive workforce, business owners, technology developers as well as the consumer.

Employment Opportunities and Career Enhancement in the Automotive Sector

The Malaysian Automotive Human Capital Development Roadmap (MAHCR) will further meet the ever growing demands of the Malaysian automotive industry, which is constantly evolving in product complexity and process efficiency.

MAI has formulated a plan to create 25,000 new jobs in the automotive sector under the Budget 2016.

The plan also comprises training for 10,000 existing workers, enhancing the competitiveness of over 100 local vendors, upgrading 2,500 existing workshops, and developing new entrepreneurs in sales, distribution, services, repair, manufacturing, remanufacturing and recycling.

Creativity & Innovation requires Conducive and Collaborative Engineering infrastructure

As the NAP 2014’s year 2020 target looms closer, it is important that the industry’s technological edge is strengthened, in the key areas of engineering design, prototyping, product validation and process development.

MAI has embarked to implement the MAI Intelligent Technology Solution (MITS) to boost the capabilities of local vendors. This is an ambitious project that will comprise an integrated technology solution for both the manufacturing and after sales sector, from product conceptualization to vehicle aftersales support.

MITS will boost local product and process development through the Design Engineering & Prototyping (DEP) program, a collaborative platform that utilizes the automotive community’s expertise in design and analysis.

The after sales sector will be enhanced through the MAI Garage Information System (MAGIS) and CarBengkel applications. This will provide service centres, spare part distributors and consumers with a single interface to meet their after sales needs.

Bringing EEV awareness directly to consumers - Bigger role for MAI at Asean Autoshow

MAI has been involved in the ASEAN Autoshow (previously known as the NST Autoshow) since 2013, and we aim to elevate the quality and excitement of the autoshow by bringing in future trends, technologies and models, with a special focus on Energy Efficient Vehicles (EEV).

This will allow the local automotive community to gain direct exposure to the global automotive ecosystem on an annual basis.

Is now the best time to consider buying a car?

Since the NAP 2014 was announced, the automotive industry has seen an unprecedented level of consumer choices in car purchases. The industry saw an accumulated average reduction in car prices of 16 percent by the end of last year.

Although the momentum of this price reduction was impacted recently due the appreciation of the US Dollar, it is undeniable that the environment of car sales has changed to the benefit of the consumer.

We have seen competition among car makers through the numerous promotions given to the consumers in last year and this year, we expect next year to be no different.

Despite possible price hikes next year, the government does not control car prices, and carmakers are free to raise or reduce their prices to fit their business plans.

Nevertheless, consumers should not base their purchasing decision only upon speculation, but rather on the need for a new car.

It is best to also weigh in the indirect losses incurred from delaying their purchases, such as maintenance of their old car and used car depreciation.

They should also take advantage of promotions available in the current time period.

2016 – what can we expect?

The Total Industry Volume (TIV) for this year is expected to reach between 640,000 to 660,000 units by the end of this month. This indicates that the industry has managed to remain stable despite the challenging global economic climate.

It is important to note that the Total Production Volume (TPV) has shown a significant October year-to-date performance from last year.

TPV, which measures industry performance in terms of units produced domestically (TIV is a measurement of domestic sales) is an important measurement of domestic value added to the industry.

As mentioned, there has been much traction from local players to strengthen their in-house capabilities in product design, manufacturing and after sales. At the same time, we are pleased to report that a few OEMs are expected to begin their export programmes next year.

These export initiatives are expected to boost domestic production next year. MAI’s forecast for next year is a TIV of 680,000 to 700,000 and a TPV of 600,000 to 620,000.

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