With the rapid development of the motor vehicle assembly and manufacturing industry in Malaysia, the value of component parts and accessories manufactured in the country totalled over RM 5.25 billion (US$1.4 billion) in 2006. However, there is still tremendous potential for growth as Malaysia currently imports a substantial amount of automotive components and parts, such as engines, transmissions and auto electronic components. The total import value, including those for completely knocked-down parts, amounted to about RM11.6 billion (US$3.1 billion) during the same year.
There are also more than 590 component manufacturers, both local and foreign, to supply the needs of the automotive industry. This development of an integrated automotive component industry provides the means to upgrade local engineering and technical skills and R&D activities, as well as to transfer technology and expertise.
With the Malaysian automotive industry moving into modular concept manufacturing, the government has provided generous incentives to attract international tier-one component manufacturers who can take advantage of the well-established vendor network in the country.
The removal of trade barriers within ASEAN has opened up a vast regional market for automotive companies which stand to benefit from potential economies of scale and enjoy access to cost competitive components produced in ASEAN countries.
