Malaysian Auto Sector Hit Hard By Tesla And BYD
Are we about to see a change in Malaysian Auto Sector with the pending NAP 2024 announcement
Last month the Malaysian Auto sector had two game changing events that sent tremors through the whole sector for everyone in the supply chain, from OEM brands, to completely knocked down (CKD) assemblers to dealers, to customers and also our government at large.
We are sure there have been heated ‘Boardroom’ discussions since and some are still ongoing on the impact this two impacts vehicle launches would have in the future of the automotive sector in Malaysia.
The first ‘shocking’ launch event was Tesla’s arrival and its announcement of its Model Y selling price from just RM199k which took the market pricing of EVs to a new low and this starting price battered the Tesla used car markets (private AP imports) which has been returning high profits for private importers.
The second was the launch of a sub RM100k all electric car. Yes, Sime Darby launched the BYD Dolphin compact hatchback at a low low low selling price that starts from just RM99,900.
This low starting price puts a lot of pressure on national car brands, Proton and Perodua who have hinted of their very own new energy vehicles (not even full electric) that will be coming at around RM90k in 2024.
(please note that hybrid and electric batteries are very expensive and you need to be producing your own batteries to stay competitive which is what Tesla and BYD have been doing)
Meanwhile, how will Tesla’s Malaysian arrival going to impact the other current automotive brands operating here?
You must understand that Tesla has set up a 100 percent owned entity in Malaysia without a local distributor, local partner ( as all other automotive brands have done in the past and even recently), no approved permit needed (AP’s), no dealer network and without after sales and parts warehousing (just signed an agreement a few days ago).
This will save them huge margins from unnecessary business layering. These cost savings will partly go to the customers and the rest to their bottom line.
All existing automotive brands will want to follow suit and flatten their supply chain structures to adapt to the disruptive changes. Distributorship and Dealership models will change and adapt or languish and or perish.
Meanwhile, the all new National Automotive Policy (NAP) is being drawn up and the above could be a teaser of changes being made. The last decade, our NAP was lacklustre and very one-sided as it was advised by a former corrupt MAI (now known as MAAri) top officer. With a change of leadership at MAAri, let’s see if this ‘speed bump’ agency will start working in a corrupt free direction.
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