Factors Potentially Enhancing National Automotive Policy Goals and Industry Innovation

Abstract

After nearly a decade since the implementation of the National Automotive Policy (NAP), the Malaysian automaker Proton, as well as various local automotive components and parts manufacturers, remain uncompetitive. Based on existing research, the NAP has not yet transformed Malaysian automotive industries into a globally competitive and export-oriented sector. It was generally claimed that parts and components produced locally suffer from qualitative and quantitative deficits vis-a-vis imported counterparts. Malaysia is currently ranked third in the ASEAN region, following Thailand and Indonesia, with regards to sales and production of vehicles and automotive components. However, in contrast to Malaysia, neither Thailand nor Indonesia possesses anational car project. This initial study aims to evaluate the effectiveness of the NAP to local automotive vendors. Numerous prior studies in the related literature have looked into the competitiveness of the national car project Proton, but only a limited number studies have focused on the effects of policies on automotive vendors. Factors identified in this study may form the backbone for further research in this area, and in turn contribute to the development of the automotive industry in the country