How will Malaysian motorists benefit from Prime Minister Anwar Ibrahim’s recent official visit to China?
The RM170 billion in investment pledges Anwar returned with from Beijing included a commitment from car company Zhejiang Geely to invest RM30 billion into Perak’s designated auto hub in Tanjung Malim, where the Proton factory is located.
Geely will surely set up lines and factories there to assemble its cars. It might even assemble powertrains and have a body shop, and export cars under the Proton badge for certain markets.
Such a major investment will surely be a game changer for Malaysia which, until now, has not succeeded in growing its automotive industry beyond import substitution.
When asked, automotive industry captains gave diverse responses about China’s disruption of the automotive market in Asean generally, and Malaysia specifically.
A senior officer of a South Korean brand who asked not to be named said:
“China carmakers will be attracted to Malaysia because it is still a big car market in Asean and remains very profitable, but electrification has re-set the auto industry, both globally and in Malaysia.”
Branding is no longer a priority, he said.
“Malaysia will see many more China brands coming in because the Chinese are very strong in battery electric vehicles (BEVs). We can also expect them to introduce cutting edge technology like connected cars,” he added.
He expects there to be intense competition in the mid-range price section of the automotive market.
“Car buyers in this sector will be spoilt for choice,” he said.
Another industry expert, who at 80 is a veteran in the local automotive scene and consults for Chinese car companies seeking to enter Malaysia, commended the prime minister for making the “first effort” to promote Malaysia to Chinese investors.
“It now depends on how good salespeople we continue to be in terms of welcoming component makers and other suppliers along the supply chain,” he said.
“Malaysia has the chance to be an automotive hub because the new generation of cars will have more electronics and computers,” he said.
“Having Geely as a big brother is also not too bad,” he added.
The veteran, who has also managed European passenger cars and commercial vehicles from both Europe and China, said Malaysia could look to Volkswagen as an example.
The German automotive giant bought the struggling Skoda brand, which eventually saw the Czech Republic carmaker expand its export market.
“Similarly, Proton can position itself to be one of Geely’s right-hand-drive brands and penetrate markets that normally discriminate against Chinese brands,” he said.
A European automotive consultant who has been based in Malaysia and Thailand for the past 15 years, however, was pessimistic about Malaysia’s chances of securing more big automotive investments from China.
“Your previous race-based policies make it very slow for Malaysia to catch up compared to Thailand, where everyone is a Thai.
“There are talents across all the races in Malaysia. Good industrial policy would allow a company to hire whoever has the requisite qualities,” he said.
He also said Chinese car brands do not have a good reputation yet.
“People buy Chinese cars because of price, not quality,” he said.
The last word on this subject, however, comes in the form of a statement of intent by Chinese electric vehicle (EV) giant, BYD, which recently launched its YangWang brand, boasting an extreme off-road SUV known as “U8” and a supercar, “U9”.
Launched on Jan 5, the U8 appears on paper to be the most capable 4×4 in the world. Not bad at all for an EV!
The two models are built on YangWang’s e⁴ platform, the first mass-produced four-motor independent drive technology platform in China, and probably the world.
BYD chairman and president Wang Chuanfu said the brand will be the first to use several BYD Group’s top technologies.
The U8 SUV introduced itself to the public at its launch event in dramatic fashion by entering in “crabwalk” mode to show off its advanced technology.
e⁴ is a power system where the four electric motors of the vehicle independently drive the four wheels, thus allowing the vehicle to theoretically achieve off-road performance superior to any traditional gear and differential transmission.
This also gives the vehicle greater safety redundancy, such as the ability to adjust the torque of the remaining three wheels at a rate of 1,000 times per second after a single-tyre blowout, helping the driver bring the vehicle to a stable and controlled stop.
Both models, which will be on display at the Shanghai Motor Show later this month, can accelerate from 0 to 100 km/h in less than 4 seconds and will be priced at RMB1 million (RM620,000).
Hopefully, this theoretically supreme 4×4 will be configured for right-hand-drive markets. BYD’s Malaysian distributor, Sime Darby Auto, may then consider bringing it in.
It would seem the essence of the China car industry’s disruption of the auto market has as much to do with new technology as it has to do with market share.
From a Malaysian perspective, the Proton X50 is the bestselling B-segment SUV and the overall bestselling SUV for the year as at March 2023. Which country do you think the X50 originates from? - FMT
The views expressed are those of the writer and do not necessarily reflect those of MMKtT.
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