M'SIA CAN BE STABLE SOURCE OF AUTO PARTS FOR JAPANESE MANUFACTURERS, SAYS FMM CHIEF

By Wan Nor Azura Mior Abd Aziz

KUALA LUMPUR, May 4 (Bernama) -- Japanese manufacturers must seriously
consider Malaysia as an alternative source for their auto parts and components
looking at the shortages that followed after Japan's recent earthquake and
tsunami disaster that affected supplies to some of these major manufacturers.

On the other hand, Malaysian manufacturers need to respond by ramping
up efforts to attract Japanese automakers and investors through high quality
auto products and a consistent supply, said the President of the Federation of
Malaysian Manufacturers, Mustafa Mansur.

"Malaysia will be a good place for the Japanese automakers and other
manufacturers to outsource their parts and components," he told Bernama in an
interview here Tuesday.

"While it is not proper to take advantage of Japan's misery, we must admit
that Japan will now re-look into its manufacturing options and probably
outsource production," he said.

On this note, he urged Japanese corporations to consider having back-up
operations outside of their country.

For instance, they can also consider using Cyberjaya as their back-up place
for outsourcing investments and operations, Mustafa said.

"Many of the Japanese companies, especially in north of Tokyo, have either
shut down their operations or reduced their operations by between 60 and 80
per cent," he said.

A news report said that output in March across the Japanese motor industry
fell at a record 15.3 per cent while car sales plunged nearly 40 per cent
following the tsunami and nuclear disaster.

Automakers sold 279,389 cars in Japan last month, down 37 per cent — the
biggest ever year-on-year drop.

The earthquake and tsunami that struck Japan has inadvertently opened up new
opportunities for Malaysian manufacturers, especially the small-and-medium
enterprises (SMEs).

Against this backdrop, Mustafa also urged Malaysian manufacturers especially
those in the automotive component manufacturing segment and electrical and
electronics sector to grab the opportunities from Japan.

Meanwhile, asked on the impact Japan's disaster would have on the local
manufacturing sector, especially local companies that buy components from Japan,
he said these companies would get affected in the next two to three months.

"We will also see a shortage of vehicles in two months," he added.

OSK Research in its research note recently trimmed the local total industry
volume (TIV) forecast for this year from 617,567 vehicles to 574,206 (down 5.1
per cent year-on-year).

Besides Japan, he said Malaysian manufacturers should also start looking at
other markets.

He said the Electrical and Electronics (E&E) manufacturers could consider
India as another market for their exports.

"India is a very huge market and they have been buying a lot of E&E products
from Japan," he pointed out.

Mustafa also urged local auto parts and components suppliers "to get out of
the box" and not solely depend on Proton and Perodua to supply their products.

They should be looking at supplying globally and moving up to capture a
wider market, he added.