Auto industry: Thailand loss is Malaysia's gain... almost...

Malaysians have always figured that the Thai automobile hub in Rayong is what the Malaysian auto industry should have been, if our auto industry had been managed properly, that is.

But wait, do you reckon, like I do, that Malaysia has been given a 2nd chance?

Mahathir is gone and the car market has been liberalised somewhat compared to the past. Best thing is, even this small, minor liberalisation has already shown up the overwhelming extent of Proton's inefficiencies and mismanagement - causing it to lose it's market position, its profitability and most of its cash reserves within a couple of years. Proton is in dire need of restructuring.

And as if on cue, Thailand stages a military coup in 2006, deposing a democratically elected govt in favour of what is essentially a military dictatorship, goes on to impose capital controls soon after that (which it reverses overnight after the SET loses 20% of its capitalisation in one afternoon) and now toys with foreign ownership controls for companies operating in Thailand. As expected, foreign investors in Thailand, as well as potential ones, are nervous as hell. They are having second thoughts... and who can blame them?

Can the time possibly be more ripe for Malaysia to step in and claim it's place as the true automotive hub of Asean?

This article from the Associated Press details Ford Motor Company's reluctance to expand its investments in Thailand, not knowing when the next coup or major policy shift will come.

The global automaker said Thailand has the potential to become a base for small-car production while maintaining its position as a leading producer of pickup trucks, but the company is still talking to the government about its investment plans and possible incentives.

A spokesman for the company contacted by telephone would not say which other countries were under consideration for the investment.

The planned factory would have a production capacity of 150,000 vehicles per year, of which 120,000 would be for export, it said.

Waddaya know... Proton has some excess capacity to manufacture small cars at it's Tanjung Malim plant. Lots of it, in fact.

So, to me... this begs the question... WHY are we still not falling over ourselves, grabbing the god-sent opportunity? Why are we still playing cat & mouse games with foreign investors? Why have we delayed tie-ups with VW and GM? Why are we so afraid of foreign investment and liberalising the auto market further?

- Are we afraid to face the fact that the NEP has failed the auto industry?
- Are we afraid that a foreign owner-partner in Proton might stop hiring its managers solely from the politically connected, bumiputra elite?
- Are we afraid they might stop buying sub-standard, low quality components exclusively from preferred (read politically connected) bumiputra suppliers?
- Are we afraid they might not grant similarly-preferred bumiputra dealerships a monopoly of the sales and distribution channel?
- Are we afraid they might actually enforce real performance and quality standards upon these 'preferred' suppliers, dealers and distributors?
- Are we afraid that they will inadvertantly halt the gravy train? Slay the NEP goose that lays the golden eggs?

The question for the Malaysian people is whether we should allow this outdated, unfair, discriminatory, inefficient NEP to rip yet another brilliant opportunity out of our hands?

Perhaps we Malaysians should make the decision for the govt. Simply stop buying Proton cars and force the company to fold. Shake the local car industry to its very foundations. Wipe the complacent smiles off the faces of Proton executives and their govt handlers. Show them the Malaysian public will vote decisively with their disposable incomes, even if they cannot yet do so with their ballots.