Business

Wednesday February 13, 2013

Malaysia, Australia auto tie-up

By CHOONG EN HAN
han@thestar.com.my


Agreement encompasses three key areas of the industry

<B>Madani:</B> ‘Although it may look one-sided for now, the duties will be gradually reduced to zero to 5% by 2016.’ Madani: ‘Although it may look one-sided for now, the duties will be gradually reduced to zero to 5% by 2016.’

PETALING JAYA: Players in Malaysia's auto industry will soon join hands with their Australian counterparts following the free trade agreement which came into effect this year.

Malaysian Automotive Institute (MAI) chief executive officer Madani Sahari said that besides the Malaysia-Australia Free Trade Agreement (Mafta), both countries had also inked an economic and technology cooperation agreement in August last year.

Essentially, it was a way for both countries to complement each other, where Australia could leverage on its technological capabilities to bring Malaysia up one level while Malaysia would be the gateway for Australia to penetrate the Asean market, he said.

“The agreement would encompass three key areas of the industry technology, human capital and supply chain. MAI would be a window to connect to Austalia's Automotive Cooperative Research Centre (AutoCRC) to tap into its technical knowledge and skills,” he said.

Since January, Madani said, five projects with a development value of RM15mil had been initiated. All are 50% funded by the Australian government, as will be future projects.

The collaboration with AutoCRC will be for five years but the parties involved are already deliberating on extending it for another five years.

“These projects involve the development of several manufacturing capabilities like tooling, pattern testing and fixture design.

“All these are to enhance the local supply chain and also the vendor's produce and process design,” he added.

Madani said although Australia's total industry volume was about 1.1 million a year, its domestic production was just 180,000 units.

In contrast, Malaysia's total industry production last year stood at 569,620 units, for both passenger and commercial vehicles.

Under Mafta, there will be zero import duties on auto components sent to Australia, while the import duties on shipments to Malaysia would be capped at 30%.

“Although it may look one-sided for now, the duties will be gradually reduced to zero to 5% by 2016,” Madani said.

MAI is also working towards mirroring Australia's auto supplier excellence programme, devising one to cater to both local and Asean industries.

“The programme will perform an overall business evaluation on auto companies in Malaysia, with a complete dissection and analysis of the businesses and opportunity sourcing for these companies to move forward,” Madani said.

So far, he said, MAI had outlined 100 tier-one vendors for the programme, with officials from Australia helping in the evaluation of the companies.

“An automotive training centre needs to be set up, too. Our benchmark will be a similar set-up like the Kangan Institute in Melbourne, which is a specialised training centre for all the OEMs (original equipment manufacturers),” he said.

Meanwhile, under the human capital programme, Madani said MAI had completed two programmes involving 46 lecturers and trainers. “We will soon liaise with the private institutions for the programme. These individuals would then train our local graduates who will soon join the workforce,” he said.

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