The Malaysian government is expected to introduce further competition in the country’s automotive sector when it announces its new national automotive policy (NAP) next month.

Local reports suggest that new vehicle production/assembly licences may be more readily available under the new NAP and restrictions on the introduction of new models and pricing may be eased. Currently, the number of foreign models available in the market is controlled by the government’s approved permit (AP) programme.

A key focus of the review will be the development of the local components sector – with the NAP taking steps to encourage improvements in quality of local parts and wider use of genuine parts.

The international trade and industry ministry said last month the review of the NAP would focus on ensuring the “orderly development of the local automotive industry”. It is unlikely to introduce policies that would threaten the future development of Proton.

Malaysia’s first national car company is reported to have re-started alliance talks with Volkswagen and new policy may be designed to maximise the potential of such an alliance.

Tony Pugliese