• Madani Sahari

Moving into the next decade

Come June next year, it would be 10 years since I took the helm of what I consider the most challenging job in my management career.

Malaysia’s automotive industry had just entered its fourth decade. My first task was straightforward but challenging — with the help of experts in the industry, I was to lead a team to formulate a way forward for the automotive industry.

On the global stage, it was a time when the hype around electric vehicles was gaining momentum, thanks to Tesla steamrolling the development of its carbon-free products.

New innovations, such as nanotechnology, lightweight chassis materials and fuel-cell engines, began showing promise, which was exciting to car owners around the world, of a new future in transportation.

The challenge for Malaysia was its domestic sales and quest for increased exports. Total industry volume was fluctuating around the 600,000 mark, and national car “fatigue” started to seep in the morale of both consumer and producer.

A paradigm shift in thinking was needed to spur the industry’s growth. The National Automotive Policy was revised in 2014, focusing on energy-efficient vehicles as a common direction.

Customised incentives were introduced to allow better investment returns in higher value-added activities along the industry value chain.

The policy also broadened its scope into business performance in lower, or separate tiers of industry sectors, such as parts and components and the aftermarket sector.

The successes have been documented in this column throughout the years. The key point of this final piece for not just this year but also the entire decade of progress we have endured is — as we move into the next decade, another paradigm shift in our industry’s thinking is timely, and we must act now, not just from business point of view, but also from the consumer’s perspective.

As we move into 2020, we must consider what the global producer and consumer are focusing on. Firstly, it is clear that global car makers are responding to trends in connectivity, as the new generation of drivers (and commuters) will be most in sync with the cloud, prioritising convenience, ease of use and active safety — digitalisation of transportation demands are expected to rise exponentially.

This transportation is not only about movement from point A to B, but the digitalisation of all aspects of our daily lives that require modes of transportation from food delivery, retail and home to car maintenance.

While the United States is seeing increasing profits in vehicle sales, it is the inverse in Europe due to the reduction in direct vehicle purchase—giving in to the rise in ride-hailing and other forms of vehicle ownership models, as public transportation in these regions improves.

While car prices in Malaysia remain competitive, the total cost of ownership had been significantly lower when fuel prices, insurance and maintenance were factored in. Perhaps the situation seen in Europe will be seen domestically in the years to come, as our public transportation improves in urban areas and the new mobility options present themselves over time.

Secondly, as energy consumption around the world becomes a more pressing issue, energy costs and environmental consciousness are expected to impact our business strategies for exportability to remain within our radar.

The protests seen at this year’s Frankfurt Motor Show is an example of consumer temperature over the next few years in terms of the transportation carbon footprint.

Mobility products and processes are expected to grow in complexity and add cost pressure, as the world moves towards higher demands of environmental regulations and safety standards.

Trends clearly indicate a stronger push towards autonomous driving, with the evolution of driver assistance becoming more sophisticated in the form of lane guidance, emergency braking assistance and eventually automatic self-corrections and traffic adaptation.

While it may take time for fully autonomous driving to be a reality on the road, this evolution requires significant reform in business strategies in the direction of technology invention, innovation and adoption — the core of this technological advancement lies in the mastery of future industries that include big data management, robotics and Internet of Things.

This mastery is not limited to automotive businesses, but for all to participate in the grander mobility industry, in which cities, agriculture, marine operations, finance, logistics, commerce and many more will form a massive framework where business opportunities are plentiful.

Therefore, the paradigm shift for next year is one of immersive technology, not just for our local market demands, but also an ever-increasing demand in the global markets if we are to remain competitive.

It is for this exact reason that Malaysia Automotive, Robotics and IoT Institute was rebranded to enhance adoption of such technologies—with more programmes to be developed to cater to the specific technology areas covered under future industries and mobility.

A future of next-generation vehicles, mobility as a service and smart manufacturing technology and innovative materials is upon us.

I’ve mentioned numerous times about moving Malaysia from a consumer to producer nation, and I believe we have to move not just to a nation of producers, but also one of thought leadership.

I wish my readers Season’s Greetings and a great era ahead.

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