EEV plan to drive sector's competitiveness
CENTRAL to the recently announced National Automotive Policy (NAP) 2014, a pertinent question arose among the general public as to why Malaysia is focusing on becoming an energy-efficient vehicle (EEV) hub in the region.
This article will provide some background of the policy agenda on EEV as an instrument to further enhance the Malaysian automotive industry.
In simple terms, EEVs are vehicles that fulfill two essential criteria, namely low-energy consumption for a set distance traveled and low- or no-emission propulsion that satisfies green initiatives.
EEVs are future vehicles to satisfy the international demand for a cleaner earth and global energy security.
Hence, EEV production will demand a high level of product technology, skilled and knowledge manpower, extensive research and development (R&D) initiatives, and more sophisticated production engineering, materials and processes.
It is noteworthy that Malaysia is not new in its attempt to venture into EEV manufacturing. Perusahaan Otomobil Elektrik Malaysia was launched in December 1997 by the then prime minister Tun Dr Mahathir Mohamad.
The years had gone by and various episodes took place along the way in the local automotive industry.
NAP 2006, for one, was introduced to assist in the transformation and integration of the local automotive industry into the regional and global network that is getting increasingly liberal and competitive.
In 2009, the NAP was reviewed to promote a more competitive market for both local and international companies in the areas of hybrids and electric vehicles, and at the same time, gradually liberalizing the industry.
The industry now needs a new playing field with a new direction to further elevate all aspects of vehicle production in a more competitive environment.
EEV production is the selected industrial arena.
In management term, it is to create a new "S-curve" to revitalize the industrial community into shaping a better automotive manufacturing and related businesses in the country from now and into the future.
Right policy instruments outlaid for Malaysia to serve as a hub for the EEV manufacturing will encourage foreign direct investments (FDIs) into the country from those reputed global car makers.
It is forecast that some six million cars will be in demand in Asean by 2020 while by 2016/2017, some 1.5 to 2.0 million production capacities are needed to fulfill the demand.
Locally, it is expected that some FDIs will flow into the country well before 2015. Malaysia will be a favored nation for EEV productions, especially to car makers that need to establish passenger vehicle production base in the Asean region.
While the components manufacturing has been liberalized, the presence of strong base local vendors that are "open" - not in affiliation with any car maker or particular brand - will be useful parts and components supporters in the EEV manufacturing activities.
EEV will open up opportunities for domestic direct investment (DDI) for local entrepreneurs to strategically venture into EEV parts and components manufacturing.
In all, if Malaysia is able to achieve the desired FDI and DDI, the sustaining volume required by local vendors is attainable and will be further enhanced with the successful penetration in export markets as inspired by the policy agenda.
On the technological development front, EEV will open up a new frontier for local technocrats, academia, R&D organisations and players in the entire supply chain to design and develop products, processes and materials to fulfil the EEV manufacturing requirement.
Acute demand for all EEVs is the kerb weight of vehicles, in which the unloaded total weight inclusive of all the standard equipment and the necessary operating consumables will have to be continuously reduced to achieve their EEV superiority. This pre-requisite demands high-end technology, extensive R&D and creative endeavors.