New Delhi: The National Auto Policy announced last month in Malaysia has eased taxation norms to attract foreign manufacturers. And Indian carmakers like Tata Motors and Mahindra & Mahindra are making a beeline for Malaysia.
Tata Motors is likely to set up an assembly line in Malaysia, as a means to get its passenger cars on Malaysian roads, thanks to Malaysia's new auto policy.
Tata Motors might soon start assembling its Indica family of passenger cars in Malaysia. The company is in talks with Scott & English, a business arm of the $2 billion DIB Hicom group for collaboration. Tata Motors already has a tie-up with DIB Hicom to assemble commercial vehicles. But now Malaysia's new auto policy has cut imports from non-ASEAN countries like India by 10-30 per cent, which makes Malaysia attractive.
Alan Rosling, Executive Director at Tata Sons says, "We keep looking at various markets. Particularly in Malaysia, the tariff structure would make sense for us to have assembly operations."
Apart from Tata Motors, Mahindra & Mahindra also plans to start an assembly unit in Malaysia. Malaysia would then become an export base for these companies to other ASEAN countries.
This would help them to obtain a manufacturing licence in Malaysia. According to a Frost & Sullivan analyst, companies using Malaysia as an export hub may get them concessions while importing fully built models.
Malaysia is the biggest car market in Southeast Asia. The National Auto Policy announced last month has eased taxation norms to attract foreign manufacturers. But the challenge for carmakers like Tata Motors and Mahindra & Mahindra will be to compete against imports from ASEAN countries because under the new Auto Policy, ASEAN vehicles will attract lower duties in Malaysia than those imported from non-ASEAN countries like India.
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