This article first appeared in The Edge Financial Daily on November 29, 2018

KUALA LUMPUR: The proposed third national car project needs to also emphasise technology and not only manufacturing to enhance its value for the economy, said political secretary to the finance minister Tony Pua.

“My personal take on the proposed project is that the technologies around the car have more importance than the manufacturing of it. If we have a company that does chips and makes intelligent cars, [then] we manufacture and supply them to car manufacturers. With that, actually we have higher value adding for our economy than attempting to build the car,” he said on the second day of the MIER National Economic Outlook Conference 2019-2020 yesterday.

Pua was one of the panellists at a session entitled “Role of Technology in Competitive Market Environment”.

Another panellist, Institute of Strategic and International Studies’ third holder of the Tun Hussein Onn Chair in International Studies, Professor Dr Jomo Kwame Sundaram, concurred, noting that the country has already one of the world’s highest rates of car ownership and selling more cars will be a challenge.

“We have the highest level of car ownership in the world, higher than the US and Australia. So, the prospects of selling more cars in Malaysia are actually quite limited,” he said.

The lack of supportive infrastructure for electric vehicles (EVs) is another concern with regard to the third national car project, he said.

“Now we are capable of producing a car without an engine. But where is the infrastructure? How many people are going to start using EVs if you do not have the appropriate infrastructure?” he asked.

Jomo  pointed to the possible challenges in the motor vehicle industry as the country signs international trade agreements.

“If [Malaysia] were to sign various international trade agreements, it is going to constrain its ability to subsidise the [national] cars and break into the market. These are all important challenges which we need to begin to think about,” he added.

Institute for Democracy and Economic Affairs chief executive officer Ali Salman also opined that the country needs to keep up with the world’s technology advancement.

“I hope that none of the budget and fiscal resources are spent or allocated on cars anymore. We do not need government money to develop new electrical cars. The world has moved on; we need to catch up with the technology and adopt the best technology,” he said.

Ali also hopes the new car policy can be introduced to drive the national car industry and better benefit the consumers.

“We expect the new car policy to lead the industry to more competition, growth, openness and innovation, which are what consumers want and can benefit from,” he said.

Last month, Deputy International Trade and Industry Minister Dr Ong Kian Ming announced that the government had so far received 21 proposals from local and foreign firms for the third national car project.