Amid the threat of foreign competition, Malaysia is seeking a partner for national carmaker Proton. There are speculations that Proton could again try for a tie-up with Volkswagen AG or seek out General Motors Corp. or PSA/Peugeot-Citroen.
Malaysia also has had to reduce tariffs on auto and parts imports as part of a deal with Asian neighbors.
Last Wednesday, the Malaysian government unveiled its National Automotive Policy, which sets a framework to deregulate the industry and end a system of import Approved Permits.
The government is doing this as a way to get around the corruption that has proliferated due to this practice. The government says that while it would allow foreign carmakers, it would keep excise duties on completely built cars and kits.
At a press conference, International Trade Minister Mustapa Mohamad said that it is of "strategic importance" to the government to help the local industry in Malaysia, the biggest car market in the Association of Southeast Asian Nations bloc (ASEAN).
First launched in 2006, the policy aims to liberalize an automotive sector that favors Proton through steep taxes on imported vehicles in Malaysia. [via autonews]