Malaysia Eyes India and TATA to Grow Automotive Sector

First, China. Next, India.

After making bedfellows of the Chinese, the Malaysian government is now seeking ties with India to strengthen Malaysia’s automotive industry. Homegrown brand, Proton, had already tied the knot with China's Zhejiang Geely and is leveraging the Chinese company’s overflowing coffers, and making headlines with potential flying cars and the highly anticipated Geely Boyue SUV. So, partnerships with automotive companies from giant automotive markets in the world seem to be the way forward.

According to Second International Trade and Industry Minister, Datuk Seri Ong Ka Chuan, when speaking to media during his Chinese New Year Open House, the ministry is hoping to attract the TATA Group to build a plant at the industrial park, next to Proton City, in Tanjung Malim.

It seems like the ministry also intends to tap into the Indian market, as Ong also pointed out that “with a population of 1.3 billion, India has vast potential”. The Indian auto industry is one of the largest in the world, and accounts for 7.1% of the country’s GDP, but comprises mostly of two-wheelers (78%) and a much smaller percentage of passenger vehicle (15%). It produced 25 million vehicles in 2017, largely for the local market. So, what can Malaysia expect to offer to the Indian automotive market, since demand is substantially met by the local auto-manufacturing sector?

Hmm...

Car buyers in India are aspirational (which is why the TATA Nano failed, because no one—not even the poor—wanted to be seen driving one). The best-selling car in India is the Maruti Suzuki Alto, of which 257,732 units were sold in 2017, at the price of 2.66 lakh (RM16,200) onwards. Perhaps we can offer them our lovely Perodua Axia (priced in Malaysia at RM24,000 onwards) as another step up in their aspirations.

More likely, though, Malaysia would be offering India automakers a doorway into the highly desired ASEAN market, which is why Geely was eager to partner with Proton in the first place, and likely that TATA would be keen to take up on the Transport Ministry's offer. Ong did add that the government hopes to turn Malaysia into an automotive hub for ASEAN, and export cars to the ASEAN markets from here.

Presently, TATA Motors Malaysia offers commercial vehicles only.

So, maybe we’ll see more Jags (owned by TATA, presently distributed by Sime Darby Auto in Malaysia) passing through our ports and waters, and, if nothing else, hopefully a few more will end up on our roads. This writer thinks that even though she can't afford to own one in this lifetime, it’s always nice to see a Jaguar F-Type cruising past.