RM2bil losses due to labour shortage, say car parts manufacturers

 

About RM5 billion in automotive parts (including tyres) are exported every year, according to parts makers.

PETALING JAYA: Labour shortages over the last two years has cost automotive parts manufacturers a whopping RM2 billion in exports per annum, according to the Malaysian Automotive Component Parts Manufacturers Association (MACPMA).

Its president Chin Jit Sin said the industry, which contributes 2% to Malaysia’s gross domestic product (GDP), said the resulting slowdown in operations has also caused delays in the delivery of vehicles.

“The automotive parts industry contributed RM26.2 billion in 2019 and exports about RM5 billion (excluding tyres) worth of parts per annum to over 60 countries in the world.

“The industry is very concerned that the labour shortage has led to export sales loss of about RM2 billion per annum as exporters had to turn away orders because many were operating at only 60-70% of the plants’ installed capacity,” he said in a letter to the trade and industry ministry (Miti).

Chin said the severe labour shortage is derailing the economic recovery of the motor industry, causing stoppages and under-production as manufacturers are not able to produce at a higher capacity.

“The car manufacturing industry needs 100% operations in order to build a car, which has thousands of parts made by hundreds of vendors in total.

“The cost of downtime and the disruption to operations due to the labour shortage is catastrophic and this situation has caused many car buyers to wait longer for the delivery of their vehicles.”

He said the industry was looking forward to Miti’s assistance in helping it resolve the severe labour shortage. - FMT