Malaysia will loosen its restrictions that prevent foreign automakers from producing small passenger cars in the country. The new policy comes as Malaysia rivals with Thailand for investments, according to Bangkok Post.
The third-biggest economy in Southeast Asia will selectively bring in foreign investments and offer incentives to lure in firms, says M Madani Sahari, chief executive officer of trade ministry unit Malaysia Automotive Institute. The previous policy only issued licenses for the manufacture of cars with engines 1.8 liters and above, the report detailed.
The new policy, which takes effect immediately, further exposes national manufacturer Proton Holdings Bhd to the foreign market. Madani says the prices of vehicles may fall by around 30% by 2018 as a result of the foreign automakers producing vehicles locally, the report explained.
The Malaysian government aims to attract automakers that still do not have major passenger car manufacturing facilities in Southeast Asia. Madani said these would include Volkswagen AG, Hyndai Motor Co, Renault SA, Fiat SpA, and some Chinese firms, Bangkok Post reported.
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