What makes a national car company? These are the six criteria required by the gov't, says MARii's Madani

The big news from last week was the naming of the anchor company for the new national car project by the government. DreamEdge got the nod ahead of other bidders and will now work towards showing a prototype in March 2020, ahead of a market debut in March 2021. Daihatsu will provide technology support, but it’s a business deal without equity partnership from the Japanese.

Aside from stating it will be an “exclusive model with a new approach to segmentation,” few specific details were divulged at last week’s briefing. However, DreamEdge CEO Khairil Adri Adnan did reveal that it would be a plus-sized B-segment sedan (originally mentioned as a C-segment) equipped with a regular ICE or hybrid powertrain, The car will be built via contract manufacturing.

The announcement brought about more questions than answers, although the government and DreamEdge will be meeting the press the end of this month to show a mock-up of the new car. Hopefully, we’ll know more about the car then. For now, the two big questions are: who is DreamEdge, and what makes a national car? We’ve already shed light on DreamEdge in a separate piece last week; now here’s the criteria needed to be a national car in Malaysia.

According to Datuk Madani Sahari, CEO of the Malaysia Automotive Robotics and IoT Institute (MARii), a company needs to fulfil six criteria to qualify as a national car company. “The six criteria are more important than the word ‘national’. We can exchange the word national to Malaysian car company or Madani car company or Anthony car company,” Madani said, referring to our man Anthony Lim.

“The word ‘national’ actually means nothing, what’s more important is that it fulfils the six criteria,” he stressed. So, what are the six things that a car company needs to be national?

“The first criteria is ‘privately funded’ with no government money whatsoever. Number two is that Malaysian equity must be higher – a Malaysian company. Number three, the company’s supply chain must be 75% Malaysian, minimum,” Madani said, explaining that vendors and dealerships are part of a car company’s supply chain. “Number four, manpower. We only allow 2% foreign manpower, 98% must be Malaysian,” he added.

Moving on, the MARii CEO said that the fifth criteria is that the national car “has to align with our definition of next-generation vehicles as in the National Automotive Policy.” The NAP revision, which was reported to be under review in June last year, was expected to be announced in Q1 this year. Then in April, it was announced that the revised policy announcement would be shifted to the second quarter. We’re now in Q3.

Madani did not elaborate on what makes a next-generation vehicle, but said that the definition will be ready by early 2022, and implementation will start from 2025.

The last criteria is significant research and development (R&D) contribution. “Basically, the best is having the entire R&D in Malaysia. However, we do give special exemption now for the platform, because we know that the platform is something carmakers share. Other than the platform, it can be done in Malaysia. That’s the minimum,” he explained.

To recap, the six criteria are being privately funded, higher Malaysian equity, majority Malaysian supply chain, majority Malaysian manpower, in-line with the government’s definition of next-generation vehicles (to be revealed in the NAP revision) and significant R&D contribution. More on DreamEdge here.

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