M'SIA MAY BENEFIT FROM JAPANESE AUTOMOTIVE'S TECTONIC SHIFT

KUALA LUMPUR, April 29 (Bernama) -- Malaysia may be a beneficiary if
Japanese automotive players decide to shift production hubs to more
"tectonically" stable regions after the March 2011 tragedy, MIDF Research said
Friday.

"The scale of the earthquake in March may be the catalyst that will force
Japanese manufacturers to diversify their operations out of Japan," it said in a
note Friday..

The research house also said a number of Japanese automakers have
transferred a substantial portion of their operations abroad while holding key
areas of manufacturing in Japan, like the upstream level of Tier 1 suppliers,
who provide big items like suspension and gearbox for cars.

"Going forward, the upstream level of Tier 1 suppliers may shift to
tectonically stable regions like in South East Asia, embarking through
technological tie-ups and joint ventures with local parties," MIDF added.

It said the same could be for the Tier 2 and Tier 3 manufacturers.

"We believe Malaysia can become a favoured nation by having more
accomodative guidelines under the National Automotive Policy to entice such
value-added foreign direct investments (FDIs).

"At the moment, the preferred nations for automotive FDIs are Thailand and
Indonesia," it added.