The Malaysian government wants more locally made parts to be used in completely knocked down (CKD) vehicles to strengthen the country's automotive industry and support local suppliers.
Speaking at the launch of the MCE Auto Hub in Serendah, Selangor, Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani said the government will now look at the entire supply chain, including Tier 1, Tier 2, and Tier 3 suppliers, instead of focusing only on direct suppliers. This will help ensure incentives go to companies that truly create value in Malaysia.
Johari also encouraged carmakers to gradually increase their local content, from 10% to 20%, 30%, and eventually 40%. He said vehicles with higher local content can be promoted overseas as Malaysian-made products, even if the brand belongs to a foreign company.
The government has long encouraged higher local content in CKD vehicles. Many models assembled in Malaysia still rely heavily on imported parts, leaving local companies to supply only basic components. Increasing local participation will help grow local businesses, improve skills, and strengthen Malaysia's automotive industry.
Malaysia