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MITI urges foreign carmakers to expand local manufacturing in Malaysia
Paul Tan, 4 August '26Headlines 4 August '26
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Malaysia's Ministry of Investment, Trade and Industry (MITI) has reiterated its call for foreign carmakers to contribute to the country's automotive ecosystem through local manufacturing, technology transfer and supplier development, rather than treating Malaysia solely as a sales market.
Speaking during the Proton e.MAS 7 plug-in hybrid electric vehicle (PHEV) local assembly line-off ceremony and a working visit to Proton's Tanjung Malim production complex, Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani said foreign manufacturers should work alongside Malaysia's automotive industry by collaborating with local suppliers and component manufacturers.
"Proton has localisation rates of up to 80% for certain models, while others achieve 70%, and the industry's SMEs (small and medium enterprises) and component manufacturers benefit from Proton's growth," Johari said.
He said Proton now owns intellectual property jointly developed with Zhejiang Geely Holding Group.
"Proton today is not like it was 30-40 years ago. It also has its own IP (intellectual property) with Geely. Geely is one of the partners working together with Proton to build the industry, and now there are almost 10,000 employees - about 9,700 to be exact - with production exceeding 150,000 units a year," he said.
Johari further added that Proton's total contribution to government revenue has exceeded MYR 806 million (US$ 196.7 million) through corporate tax, sales tax, excise duties and import duties.
"This is one example. I stress to carmakers that when they come here, they should not just sell cars but coexist with our existing ecosystem and help build it together with our entrepreneurs and component manufacturers. We will all benefit in terms of jobs and profits, and even the government will benefit. Proton (in the past) did not have the opportunity to ramp up production from a technological perspective. Geely had the technology, shared it with Proton, and registered certain IPs in Malaysia. This kind of partnership involves technology sharing and local IP development, not just coming here to sell cars," he said.
Johari further added that while vehicles are not essential goods, the government would continue supporting investments that generate employment and broader economic benefits.
"Cars are actually not necessity items, but if we are going to do this, something that benefits the rakyat and creates jobs, I will facilitate it," he said.
The minister's remarks came during a high-level MITI delegation's visit to Proton's Tanjung Malim manufacturing complex, led by Johari and Deputy Minister Sim Tze Tzin. During the visit, Proton outlined its long-term business strategy, including future initiatives based on its Advanced Modular Architecture (AMA) platform, which currently underpins the Proton Saga. The visit also marked the official start of local production of Dedicated Hybrid Transmissions (DHT) and Electric Drive Units (EDU) at Proton's Powertrain Plant.
With the launch, Proton has become the first automotive original equipment manufacturer (OEM) in Malaysia to locally manufacture both DHTs and EDUs, which are key components for electrified vehicles.
The initiative involved a MYR 121 million (US$ 29.5 million) expansion of the Powertrain Plant. Eight of the 16 supporting component suppliers are Malaysian companies, increasing local content for the locally assembled Proton e.MAS 7 PHEV, which recently became the first locally assembled plug-in hybrid electric vehicle to be produced at Tanjung Malim. The localisation programme supports MITI's objective of reducing the country's trade deficit by encouraging both domestic and foreign OEMs to source higher-value vehicle components from Malaysian suppliers.
During the tour, Johari said Proton's partnership with Geely has contributed to Malaysia's technical and manufacturing capabilities. Proton Deputy Chief Executive Officer Dato' Ir. Abdul Rashid Musa said the company's investments extend beyond vehicle assembly to include engineering expertise and supply chain development.
He further added that these investments, together with the development of the Automotive High-Tech Valley (AHTV), are intended to support Malaysia's expansion of regional exports of electrified vehicles in the future.
Speaking during the Proton e.MAS 7 plug-in hybrid electric vehicle (PHEV) local assembly line-off ceremony and a working visit to Proton's Tanjung Malim production complex, Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani said foreign manufacturers should work alongside Malaysia's automotive industry by collaborating with local suppliers and component manufacturers.
"Proton has localisation rates of up to 80% for certain models, while others achieve 70%, and the industry's SMEs (small and medium enterprises) and component manufacturers benefit from Proton's growth," Johari said.
He said Proton now owns intellectual property jointly developed with Zhejiang Geely Holding Group.
"Proton today is not like it was 30-40 years ago. It also has its own IP (intellectual property) with Geely. Geely is one of the partners working together with Proton to build the industry, and now there are almost 10,000 employees - about 9,700 to be exact - with production exceeding 150,000 units a year," he said.
Johari further added that Proton's total contribution to government revenue has exceeded MYR 806 million (US$ 196.7 million) through corporate tax, sales tax, excise duties and import duties.
"This is one example. I stress to carmakers that when they come here, they should not just sell cars but coexist with our existing ecosystem and help build it together with our entrepreneurs and component manufacturers. We will all benefit in terms of jobs and profits, and even the government will benefit. Proton (in the past) did not have the opportunity to ramp up production from a technological perspective. Geely had the technology, shared it with Proton, and registered certain IPs in Malaysia. This kind of partnership involves technology sharing and local IP development, not just coming here to sell cars," he said.
Johari further added that while vehicles are not essential goods, the government would continue supporting investments that generate employment and broader economic benefits.
"Cars are actually not necessity items, but if we are going to do this, something that benefits the rakyat and creates jobs, I will facilitate it," he said.
The minister's remarks came during a high-level MITI delegation's visit to Proton's Tanjung Malim manufacturing complex, led by Johari and Deputy Minister Sim Tze Tzin. During the visit, Proton outlined its long-term business strategy, including future initiatives based on its Advanced Modular Architecture (AMA) platform, which currently underpins the Proton Saga. The visit also marked the official start of local production of Dedicated Hybrid Transmissions (DHT) and Electric Drive Units (EDU) at Proton's Powertrain Plant.
With the launch, Proton has become the first automotive original equipment manufacturer (OEM) in Malaysia to locally manufacture both DHTs and EDUs, which are key components for electrified vehicles.
The initiative involved a MYR 121 million (US$ 29.5 million) expansion of the Powertrain Plant. Eight of the 16 supporting component suppliers are Malaysian companies, increasing local content for the locally assembled Proton e.MAS 7 PHEV, which recently became the first locally assembled plug-in hybrid electric vehicle to be produced at Tanjung Malim. The localisation programme supports MITI's objective of reducing the country's trade deficit by encouraging both domestic and foreign OEMs to source higher-value vehicle components from Malaysian suppliers.
During the tour, Johari said Proton's partnership with Geely has contributed to Malaysia's technical and manufacturing capabilities. Proton Deputy Chief Executive Officer Dato' Ir. Abdul Rashid Musa said the company's investments extend beyond vehicle assembly to include engineering expertise and supply chain development.
He further added that these investments, together with the development of the Automotive High-Tech Valley (AHTV), are intended to support Malaysia's expansion of regional exports of electrified vehicles in the future.