Automotive industry in Malaysia

[2] The Malaysian automotive industry also hosts several domestic-foreign joint venture companies, which assemble a large variety of vehicles from imported complete knock down (CKD) kits.

The automotive industry in Malaysia primarily serves domestic demand, and only several thousand complete built up (CBU) vehicles are exported annually.

[5] The automobile market in colonial Malaya was relatively small, and catered mainly to British expatriates and wealthy ethnic Chinese entrepreneurs in major cities such as Singapore, Penang, Kuala Lumpur and Ipoh.

[9] Ford sought to capitalise on existing Anglo-American ties to expand globally, and Malaya was recognised for its strategic potential as a regional export base.

[11] In January 1930, Ford Malaya moved operations to a warehouse in Prince Edward Road, where they carried out more sophisticated semi-knock down (SKD) assembly.

In mid-1926, GM approached the British administration in Singapore and requested permission to build an assembly plant in the affluent Tanjong Katong area.

[21] ISI develops self-sufficiency through the creation of a strong domestic market, and is primarily state-driven through nationalisation, subsidisation, increased taxation and protectionist trade policies.

The government would issue manufacturing licenses to both foreign and local companies who were interested in setting up automobile assembly plants in any Malaysian state, including Singapore.

[26] The government hoped that the gradual increase of local content and technology transfer over the next decade or two would eventually bring about cars that are fully 'Made in Malaysia'.

[27] In 1966, ten automobile firms banded together to establish the Motor Vehicle Assemblers Association (MVAA), and pleaded for a common automotive market between Malaysia and the newly independent Singapore.

[47] In addition to the quality concerns, anti-Japanese sentiment was still strong in 1950s and 1960s Malaysia, owing to bitter memories from the Japanese occupation several years prior.

Prices of new cars in Malaysia had inflated significantly through the 1970s, with most if not all locally assembled CKD models generally costing more to produce than an equivalent CBU import.

The National Car Project was drafted in the early 80s with the objective of accelerating technology transfer, increasing and rationalising local content, and involving more bumiputera entrepreneurs in the then largely ethnic Chinese dominated Malaysian automotive industry.

[80][81] National car company Proton currently operates three manufacturing plants in Malaysia, with a combined maximum annual capacity of 360,000 units.

Market sales leader Perodua currently operates two manufacturing plants in Malaysia, with a combined maximum annual capacity of 350,000 units.

[98] Perodua had previously assembled the first generation Toyota Avanza under contract, and the company currently produces models with Daihatsu badging for export to the Indonesian market.

[107] Tan Chong Motor Holdings (TCMH) currently operates two manufacturing plants in Malaysia, with a combined maximum annual capacity of 100,000 units.

The original TCMA plant in Segambut was built in 1976, and currently assembles Subaru, Mitsubishi and Renault models, in addition to various commercial vehicles.

[119][120] The bulk of TCMA Segambut production historically consisted of Datsun/Nissan vehicles, but the plant has also carried out contract assembly for Subaru, Volkswagen, Audi, Peugeot and Renault models in the past.

The decision was made in anticipation of the impending AFTA implementation in the early 2000s, a period in which many foreign car companies had increased their market presence in Malaysia.

The VCMM plant was established as Swedish Motor Assemblies (SMA) in September 1966 through a joint venture between AB Volvo and the Federal Auto Company Sdn.

SMA had also conducted contract assembly operations for various car companies, including Datsun, Alfa Romeo, Daihatsu, Subaru, Suzuki, Renault, Land Rover, Mazda and Perodua among others.

[155][156] However, various complications occurred in the following years, and in 1967, Toyota signed a separate distributor agreement with Borneo Motors, a subsidiary of London-based Inchcape.

[175] The Pekan automotive complex has produced a diverse variety of vehicles over the course of its history, with models from over 20 different car companies, both domestic and foreign badged.

[176] HICOM Automotive Manufacturers (Malaysia) traces its origins to the mid 1970s, when the TATAB Industries Assembly Plant (TIAP) was established under a 70:30 joint venture between Pahang-based TAB group and Tata of India.

[177] However, the three-way joint venture suffered multiple complications and setbacks, including the loss of then HICOM chairman Yahaya Ahmad in 1997, and the subsequent Asian financial crisis.

[176] By the mid 2000s, the Pekan automotive complex had taken on assembly of Mercedes-Benz vehicles through a joint venture between DaimlerChrysler Malaysia (DCM) and Malaysian Truck & Bus (MTB).

Although low volumes were anticipated, Suzuki invested RM20 million to establish a robotic welding line to ensure quality control and efficiency.

Prime Minister Mahathir Mohamad, the main proponent of the third national car, justifies the need for its existence as part of a long-term vision for Malaysia to develop self-sufficiency with high-tech industries and a highly-skilled labour force.

[197] In August 2019, the Ministry of International Trade and Industry shortlisted Cyberjaya-based DreamEdge as the company which will spearhead the NNCP, with technical assistance from Daihatsu.

Rubber plantation
The former Ford Malaya plant in modern day Singapore
In 1956, British imports accounted for 65% of new vehicle sales in Malaya. [ 20 ] ( Morris Minor pictured)
The Mk1 Ford Cortina became Malaysia's best-selling car in 1964. [ 24 ] It was built at the Ford Malaya plant in Singapore. [ 25 ]
By 1980, Japanese marques had captured 80% of the West Malaysian market. [ 45 ] ( Datsun 120Y pictured)
Sales of new passenger and commercial vehicles in Malaysia, 1967–2016
The first generation Proton Saga was produced at the original Shah Alam plant for 22 years. [ 82 ]
The Proton Waja became the debut model for the MVF plant.
The Proton GEN•2 is the first model to roll out of the Tanjung Malim plant.
The Perodua Kancil was produced for 15 years at the original Serendah plant.
The Perodua Axia became the debut model for PGMSB.
The TCMA-assembled Datsun 120Y was a best-seller in Malaysia. [ 48 ]
The Nissan Vanette became TCMA's first export model. [ 116 ]
TCMA exported Subaru SUVs to Thailand and Indonesia.
Oriental Holdings held the Honda franchise prior to Honda Malaysia. [ 125 ] Honda cars were assembled in Malaysia since 1969. [ 41 ]
The second generation Honda CR-V became the debut model for the Pegoh plant.
The Honda Jazz Hybrid (GE) became the first hybrid car to be assembled in Malaysia. [ 130 ]
Honda Malaysia produced its 600,000th unit in March 2017. [ 132 ]
Inokom became the first to produce the Hyundai Ioniq outside Korea.
Inokom exports BMW cars to the Philippines.
Inokom exports Mazda SUVs to Thailand.
The Volvo 144 became the debut model for the Swedish Motor Assemblies plant. [ 38 ]
SMA carried out contract assembly for various car companies, such as Alfa Romeo . [ 141 ]
VCMM's export demand currently exceeds domestic sales. [ 142 ]
The first generation Corolla became the first Toyota model to be assembled in Malaysia. [ 151 ]
Champion Motors assembled a wide variety of vehicles, including the Chevrolet Impala . [ 157 ]
ASSB produced its 1,000,000th vehicle in April 2011. [ 151 ]
ASSB produces the HiAce for both Malaysia and Thailand. [ 162 ]
UMW Toyota's second plant commenced operations in 2019. [ 150 ]
The Wingle 5 pickup truck became the first Great Wall model to be assembled in Malaysia. [ 169 ]
Malaysia is Haval 's production hub in Southeast Asia. [ 167 ]
AMM assembled several Citroën models, including the CX . [ 177 ]
The Pajero was one of several Mitsubishi vehicles assembled by AMM.
The HICOM Perkasa .
Several Proton models were produced at the AMM plant. [ 176 ]
AMM briefly produced Kia and Naza models under contract.
The Mercedes-Benz V221 S500L is the most expensive car ever to be assembled in Malaysia. It cost 1 million ringgit in 2008.
MBM also assembles Mercedes-Benz and Mitsubishi Fuso commercial vehicles.
HAMM assembled the Suzuki Swift. A small number were also exported to Brunei.
The B7 Passat became the debut model for the Volkswagen Pekan Plant.