Title: Automotive industry in Malaysia: an assessment of its development

Authors: Peter Wad, V.G.R. Chandran Govindaraju

Addresses: Centre for Business and Development Studies, Department of Intercultural Communication and Management, Copenhagen Business School, Frederiksberg DK-2000, Denmark. ' Department of Economics, Faculty of Business Management, Universiti Teknologi MARA, KM 12 Jalan Muar, 85009 Segamat, Johor, Malaysia

Abstract: This paper explains the evolution and assesses the development of the Malaysian automotive industry within the premise of infant industry and trade protection framework as well as extended arguments of infant industry using a global value chain perspective. The Malaysian automotive industry expanded in terms of sales, production, employment and local content, but failed in industrial upgrading and international competitiveness. The failures can be attributed to (a) lack of political promotion for high challenge-high support environment, (b) low technological and marketing capabilities and (c) limited participation in the global value chain. Although the Malaysian infant industry protection policy comprised many promising initiatives, the national and the overall domestic automobile industry ended up as a captive of the regionalised Japanese keiretsu system in automobile manufacturing. A new transformation is required to push the industry beyond its current performance through a more strategic productive coalition with multiple stakeholders including trade unions.

Keywords: automobile industry; competitiveness; infant industry; trade protection; global value chain; performance; economic crisis; PROTON; Malaysian auto industry; automotive technology; marketing; political promotion; automotive manufacturing; trade unions.

DOI: 10.1504/IJATM.2011.039542

International Journal of Automotive Technology and Management, 2011 Vol.11 No.2, pp.152 - 171

Published online: 07 Apr 2011 *

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