Dato Madani Sahari, the CEO of Malaysia Automotive, Robotics and IoT Institute (MARii)

Dato Madani Sahari, the CEO of Malaysia Automotive, Robotics and IoT Institute (MARii)

In a fourth guest article written exclusively for just-auto, Dato Madani Sahari, the CEO of Malaysia Automotive, Robotics and IoT Institute (MARii), describes the potential impact of COVID-19 on Malaysia and its burgeoning automotive sector.

Malaysia's Movement Control Order (MCO) announced by the Prime Minister, Tan Sri Muhyiddin Yassin last month  has been further extended to April 14, making the MCO a month long ordeal for Malaysians.

In his first month in office, the new prime minister has had to make some tough, yet necessary calls to safeguard the lives of his countrymen, at the same time announcing economic band-aids to quickly mend impacts from the month-long halt to non-essential trade and services.

While there are obvious economic consequences, the hard truth is that there are no ideal solutions for governments around the world that are combating the spread of COVID-19. This pandemic has placed decision makers in an unprecedented tight spot - bite the bullet now and wade through the short terms difficulties, or risk long term consequences of an economy running with an invisible killer at large.

This week, the Malaysian government announced several financial incentives to soften immediate impacts from the MCO, both for individuals and businesses alike. Housing and vehicle loans as well as businesses financing were given automatic opt-in 6 months stay of payment, and those eligible were also allowed early withdrawal of their retirement funds. While the direct benefits are obvious, they also did well to maintain positivity of the populace in such trying times.

Despite some criticisms, it was perhaps the best balance for an economy that depends on stable oil prices and a thriving manufacturing and services sector. With limited resources and increasing pressure to secure the national budget balance, both government and citizens need to chip in to ensure long term impacts are kept at bay.

However, these difficulties has also brought out the true spirit of Malaysians.

On a more positive note, in areas where internet connectivity is accessible, Malaysians have adapted quickly to the sudden restriction in mobility.

Many companies are running business as usual – online meetings, retail, management, and many operations have moved online, taking full advantage of teleconferencing technology provided free of charge by companies such as Google and Zoom during the COVID-19 crisis.

This is much needed good news in which certain sectors have found ways to continue on without much government assistance, allowing valuable resources to be channeled towards those that truly need them in this time of uncertainty.

Perhaps the biggest lesson learned is the need for increased technology adoption, in case a prolonged or repeated outbreak occurs.

Perhaps the biggest lesson learned is the need for increased technology adoption, in case a prolonged or repeated outbreak occurs. Hardest hit were manufacturing sector and industries that depend on human on-location presence, such as tourism and events.

While automation or virtual technologies posed possible alternatives to manufacturers and consumers alike, previous social norms dictated lower reception from the market make to these technologies commercially viable.

Opportunity ahead for labour intensive countries

In traditionally labour intensive countries like Malaysia, the coronavirus episode should provide an impetus for the industry to expedite its adoption of automation and new manufacturing technologies. The country has seen the importance of automation through policies such as the National Policy on Industry 4.0 announced last year, and the COVID-19 has emerged as a strong case-study on the required utilisation of connected technologies in all sectors.

Within the automotive sector – the general consensus is that while there are concerns, there is no need to press the panic button just yet. While Europe still struggles with the coronavirus outbreak, China and South Korea have showed signs of control over the spread in their own countries.

In China, Hubei province and Wuhan have begun to lift travel restrictions, a hopeful sign that China has succeeded in flattening the coronavirus curve – in turn signalling business will resume for one of the Asia Pacific's major partner to its automotive sector.

For now, Malaysia's priority is rather obvious. We have seen two actionable outcomes – flatten of the curve just as China and South Korea appear to have done, or delay decisions and further escalate the spread in the footsteps of Italy and Spain.

For the first time – government officials, law enforcement, the private sector, as well as individuals and even their children – are spreading the message to stay at home, while granting their utmost support to health officials in the fulfilling the highest priority, breaking the chain of the coronavirus and returning the economy back to normalcy.

This virus, as scary as it may be, may have just united Malaysia more than ever.

The writer is the chief executive officer of Malaysia Automotive, Robotics and IoT Institute (MARii).