Malaysia’s national cars

The Malaysian car industry is on a roll, primarily because of a new leadership in government that has buoyed consumer optimism since its elections last May.

This bodes well for its two national car companies, Perodua (for Perusahaan Otomobil Kedua Sendirian Berhad) and Proton Holdings Bhd, which together account for over 50 percent of car sales in Southeast Asia’s third largest economy with a predominantly middle-class population.

Perodua and Proton are the offshoot of Malaysia’s push for industrial nationalization in the late 60s, although the two companies were only established through direct government involvement in 1993 and 1983, respectively.

I mention Perodua first because currently, it holds almost 40 percent of the market, thanks largely to its five-door hatchback, the Axia, popularly known as Malaysia’s most affordable car which carries a starting suggested price tag RM22,990 or about P290,000.

The Axia is regarded as the first car of many young professionals just out of college, and when they rise in the corporate ladder, there are a couple more models–still affordable–that can answer to their upgraded lifestyles.

Perodua is in partnership with Japan’s Daihatsu, known for its robust internal combustion engines, and thus makes the cars rolled out from this synergy quite reliable.

When you hear locals speak of “Made in Malaysia,” there’s no disparaging tone, and although there’s no overflowing gush of national pride either, it perfectly fits the Malaysian government’s objective of prospering a national automotive industry.

Of course, both companies do not have the stature that their counterparts in other more successful countries like Korea, India, or China outside the US, Japan and Europe have achieved, but where they are now still makes for relatively remarkable stories.

Big crowds

Kuala Lumpur, Malaysia’s capital, has an international motor show that’s mounted every three years or so, organized by the Malaysian Automotive Association. The last exposition was held in 2013, a jam-packed event held at the Putra World Trade Center.

The ninth edition of the Kuala Lumpur International Motor Show (KLIMS) was held at the end of November last year, but this time at a bigger venue, the newly opened Malaysia International Trade and Exhibition Centre (MITEC).

Despite the fact that entrance fees are about the equivalent of P300 per person, Malaysians flocked to the 10-day event hoping to catch a closer look of new models that would be introduced in the country within the next few months.

While Malaysians are regarded by European brands as their biggest market, Perodua and Proton’s booths drew big crowds, an indicator that price still ruled consumer preference in this country.

For example, Perodua’s Myvi GT, a sportier version of the immensely popular Myvi hatchback (starting price at about P550,000), debuted at KLIMS with bolder front and rear bumpers, upgraded brakes behind 17-inch sports rims, Alcantara bucket seats, and a flat-bottomed steering wheel, among others.

Equally, or perhaps more, popular was the Proton booth where people closely peered at the X70 sports utility vehicle (SUV), mounted on Geely’s best-selling Boyue. Malaysia is entering the era when consumers are starting to appreciate SUVs over sedans and hatchbacks.

Chinese carmaker Geely has a substantial share in Proton, Malaysia’s first national car company, and is eyeing to expand its sales in the country utilizing Proton’s largely under-utilized Tanjung Malim right-hand drive auto manufacturing plant.

Geely/Proton also hopes that it will be able to recover lost market share to Perodua with the introduction of new models in the coming years. Proton’s past financial difficulties had limited its new offerings, giving Malaysia’s second national car company, Perodua, a big advantage.

Malaysians are excited about the X70 SUV for its more premium look and more modern feel, which was also echoed by Datuk Aishah Ahmad, MAA president and KLIMS ’18 organizing committee chairperson.

She was apprehensive of the new venue’s location, which was farther away from the city center, as well as with the cost. Even with the much-improved space that allowed exhibitors with better high-ceilinged halls to mount more extravagant displays, Malaysian car brand distributors found the participation fees on the high side.

As a result, there were fewer participants at KLIMS ’18 although crowd turnout continued to be high.

This year, 2019, Malaysia hopes to keep sales growth on a positive light, topping at over 600,000 units, even if only on single digit growth compared to 2018, largely because of an increased tax slap, as well as other economic developments.

A new government under a popular party, though, is expected to fuel future economic growth, which has made auto brands optimistic of sales prospects in the coming years.