Gentlemen, to your cars

One of the big problems with Malaysia's development model is the confusion of objectives. Hopefully, the focus on national development and economic growth will have been addressed by the official retirement of the Foreign Investment Committee and the scuppering of the 30 per cent bumiputera equity requirement in listed companies.

The next, new step is to ensure that this will truly result in more growth and that this growth is distributed fairly amongst all Malaysians, rich and poor.

Air Asia boss, Datuk Tony Fernandez rightly described it when he said that meritocracy was essential to a company achieving globally competitivity.

In the automotive sector, there are at least two Malaysian-owned companies in the KLSE that  will be amongst the tigers of growth if they are allowed to compete on fair terms in both the domestic and regional markets.

In the first stage, they will gain market share in the domestic market mostly at the expense of both Proton and Perodua. Ironically, this will remove from Proton the pressure of meeting domestic demand when order books for hot models are full-up and customers have to wait for half a year.

Once they have a sufficient volume, they will be able to justify the Rm20 million to install the CKD assembly line that's needed to make one model. Naza, Tan Chong, and Oriental Assemblers have the financial power and know-who to source for models from China and Europe for local assembly and sale to the region.

This is the power of the new economic model that Najib's government is rolling out. What if Naza, Tan Chong, Oriental Assemblers, and Proton become successful in the 580 million population Asean market? There will be many more people employed.

Hopefully, Najib has special news for the automotive sector. What's happened with the affirmative action programme for the automotive sector is clearly seen after almost 35 years of implementation.

We have created a class of bumiputera AP billionaires. The distribution of wealth has been very concentrated to a few individuals and there's been no participation of the masses of other Bumiputera.

It's therefore patently clear that the automotive sector needs a liberalisation so that there's more participation by all Malaysians. This will be a strong hormone booster for the automotive sector.

When I think of my friend Reza and his team at Tan Chong churning out various iterations of the Renault Kangoo because of the unfair trading practises that's been loaded on the non-national automotive sector, I just can't help but wonder at what they could achieve in countries like Vietnam, Thailand and Indonesia if they were first unleashed in the domestic market.

For those who think that Proton will not survive the opening of the Malaysian car market, there are many others who think that its on-going re-engineering will see it through.

Its made-in-Malaysia models like the Savvy, the Gen2, the Persona and the Exora have an amazingly good ride and handling. One Proton model is already being pirated in China. It doesn't have the ideal range of powertrains yet but that can be fixed by sourcing some good modern 1.4 and 1.9 clean diesels from Europe.

Taking into consideration Tun Mahathir Mohamad's idea of a high value economy, then there can be a new phase of the car policy. The United States and China are both on a direction of fuel efficiency and low carbon emissions and the Malaysian government should also plan fiscal incentives in tandem.

Thailand has its eco-car policy and many more years of political unrest as long as Thaksin is around. Malaysia has Proton and a mouldering automotive sector that can be bolted into action if there's a programme, say 10 year tax holiday and capital allowances amongst others, for investments in building low carbon-emission cars.