The chairman of Geely, Li Shufu, has highlighted the challenges facing Malaysia’s automotive industry, particularly in its supply chain. He has identified that the country’s automotive supply chain costs are 30 per cent higher than China and 10 per cent higher than Thailand. This difference is primarily due to Malaysia’s heavy dependence on overseas imports for parts supply.
During an interview on China’s state-owned CCTV programme “Dialogue,” which was subsequently reported by Chinese tech website CNMO, Li expressed concerns regarding Malaysia’s reliance on overseas imports for automotive parts supply. He has underscored the difficulty of achieving economies of scale in the relatively small local automotive market, resulting in increased costs.
Recognizing the seriousness of the situation, Li has emphasized that one of Geely’s main priorities is to contribute towards enhancing the competitiveness of Malaysia’s automotive industry supply chain. To achieve this, Geely intends to facilitate the development of Malaysia’s auto parts industry by bringing in advanced global auto parts companies and strengthening collaboration with local suppliers.
Li’s perspectives offer valuable insights into the complexities of Malaysia’s automotive industry. The challenges highlighted underscore the necessity for strategic interventions to enhance the competitiveness and sustainability of the country’s automotive supply chain.
As Malaysia endeavors to establish itself as a competitive entity in the global automotive industry, it is imperative to address the cost differentials in the supply chain. By attracting advanced global auto parts companies and fostering collaboration with local suppliers, the industry can work towards reducing costs and enhancing efficiency.
It is evident that Li Shufu’s insights reflect the significance of enhancing the domestic automotive supply chain in Malaysia. The initiatives outlined by Geely demonstrate a dedication to addressing these challenges and contributing to the development of the country’s automotive industry.
In conclusion, Li Shufu’s remarks on Malaysia’s automotive supply chain provide valuable insights that underscore the necessity for strategic interventions to improve competitiveness. As the industry continues to evolve, addressing the cost differentials and promoting localization will be instrumental in driving sustainable growth and success in Malaysia’s automotive sector.