Malaysia’s auto supply chain is 30% more expensive than China’s, limiting market competitiveness – Li Shufu
In the automotive industry, keeping production costs as low as possible is paramount, as the higher the costs, the less competitive they are. How – or whether – the market develops is largely determined by the ability to secure or produce the elements in the supply chain, in the form of components or raw materials needed for production, in terms of efficiency. cost effective.
In this regard, Malaysia is lagging behind and that is an important factor restraining the country’s growth. That is the view of Geely Chairman Li Shufu, who believes that the competitiveness of Malaysia’s auto industry is being constrained by auto supply chain costs, which are about 30% higher than in China and 10% higher. compared to Thailand.
In an interview about state ownership surveillance cameras “Dialogue” program was selected by a Chinese technology website CNMOLi believes that the fundamental reason for the high cost of Malaysia’s auto supply chain lies in the lack of competitiveness of domestic components.
He said that Malaysia’s auto parts supply is still heavily dependent on imports from abroad and that the relatively small size of the local auto market means it is difficult to have enough scale to reduce costs.
Realizing the severity of the problem, Li said one of Geely’s current priorities is to help improve the competitiveness of the country’s auto industry supply chain. He emphasized that Geely will promote the localization of Malaysia’s auto parts industry by introducing global advanced auto parts companies into the market and strengthening cooperation with suppliers local.
There is no doubt that the majority of investment activity will revolves around development Later Automotive High-Tech Valley (AHTV) project. The Chinese automaker said last year it had big plans to increase investment in Malaysia RM32 billionat the same time turning the country into a production center for export markets.
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