Globalizing our carmakers.

As the debate about the status of our national carmaker rages on, I believe that we missed the point that there are other carmakers beside Proton and Perodua in Malaysia. These companies have their manufacturing facilities with high content locally made components Volvo, Nissan, Honda and Hyundai have facilities in Malaysia, and they produce cars with high local contents. While Tun Mahathir question the merit of Naza as national car and Datuk Shahrir urged the reduction of minimum local content to 40% for national cars, I believe that we should free these carmakers from such constraints, be it 40% or 90%. We should let these carmakers make their own decision on where to buy their components, be it local or from other countries.
Restriction in local content will slow adoption of new technologies and render these carmakers uncompetitive in the long run. The last thing we want is that Proton or Perodua produce cars that is 2-3 years behind its competitors. Being able to outsource their component might give these carmakers its competitive advantage, reducing costs and able to pass on the savings to customers in the form of competitive pricing and good quality. Local components manufacturers have already produce high quality products, and by opening the market, they will have to market their capability to other global car manufacturers. More investment would be ploughed into component manufacturing to keep up with the competition.
These days most global car brands outsource their component from wherever the price and quality is advantageous. Some Honda brands are made in USA and Europe, while more Toyota components are made in Thailand. Recently Toyota made an agreement to buy electric motors for hybrid cars from Hitachi. These example shows that the concept of national car and local content is out of date. Let’s invest in Proton, Perodua, Volvo, Hyundai, Naza-Kia local manufacturers’ shares and let their management maximize the companies’ values. Who knows one of these days, our local car brand could become global brand.