Auto policy to build industry strength, say experts, not EV ‘supermarket’

 Analysts warn that without strong localisation, local industry players will lose their place in the market.

Without localisation plans, the presence of foreign EV assembly plants in the country would offer limited benefit to the local automotive ecosystem, says investment, trade and industry minister Johari Ghani.

PETALING JAYA:

 Putrajaya’s new electric vehicle (EV) policy seeks to ensure Malaysia’s automotive ecosystem gains real value from foreign carmakers, rather than evolve into a mere “supermarket” for imported brands, say industry experts.

Universiti Teknologi Petronas adjunct lecturer Samirul Ariff Othman said the policy introduced by the investment, trade and industry ministry (Miti) is not intended to exclude foreign EV makers altogether.

Samirul Ariff Othman.

Instead, he said it seeks to ensure that new entrants make meaningful contributions through export commitments, localisation and technology transfer — signalling a broader shift in Malaysia’s industrial strategy.

“What is changing is not who can enter, but on what terms.

“The concern is less about nationality and more about avoiding a scenario where Malaysia becomes purely a consumption market, especially at a time when global EV markets are facing oversupply and aggressive price competition,” he told FMT.

Samirul described Malaysia’s approach as “developmental”.

“It seeks to ensure that competition drives localisation, skills development and technology transfer, rather than displacement,” he said.

Samirul said Miti’s policy creates space for national players in the industry, while helping the automotive ecosystem to evolve rather than face decay.

He was responding to recent criticisms of Miti’s policy and the strict conditions imposed on a proposed investment by Chinese EV manufacturer BYD, which critics claim was an attempt to shut out the Chinese automaker.

Last week, investment, trade and industry minister Johari Ghani announced that BYD was reevaluating plans to build a local assembly plant for completely knocked-down vehicles in Tanjung Malim, Perak.

The terms included a requirement that BYD export at least 80% of the assembled cars, and for the remaining 20% to be priced at above RM200,000 a unit.

Johari Ghani.

Johari said BYD had obtained an interim manufacturing licence for the plant in September last year on the basis of export-oriented production in line with the country’s National Automotive Policy and the New Industrial Master Plan 2030.

He also said stressed that without localisation plans, the plant’s presence in the country would offer limited benefit to the local automotive ecosystem.

Small and Medium Enterprises Association of Malaysia (Samenta) president William Ng cautioned that Putrajaya’s EV policy would carry long-term implications for Malaysia’s SME-driven automotive ecosystem.

William Ng.

He said Malaysia’s EV industrial base would whittle without protection.

“Without strong localisation requirements, Malaysia would essentially become a supermarket for foreign EVs. The long-term impact would be the erosion of our industrial base.

“Our economy would benefit only from low-value retail and maintenance jobs, rather than high-value engineering and production roles. We would miss the chance to become a regional hub for EV exports,” Ng told FMT. - FMT