`Malaysia aims to become a SE Asian auto hub'

`Malaysia aims to become a SE Asian auto hub'

Agence France-Presse, Kuala Lumpur

Malaysia aims to become a regional hub for the auto industry
in Southeast Asia, a senior minister said Tuesday.

"After all, with rapid advancement in technology, automotive
production is no longer about cheap labor assembly and
manufacturing," Trade minister Rafidah Aziz said in a statement.

"Malaysia is well placed to be an efficient and cost effective
regional production and distribution base," she said.

Rafidah was speaking at the launch of the Inokom ATOS vehicle,
which is jointly produced by Malaysia's Inokom Corp. and Hyundai
Motor Co. of South Korea. The one liter engined vehicle is
produced in the northern Kedah state.

Inokom said it hopes to manufacture 10,000 to 15,000 of the
vehicles annually and was eying the regional market for exports.

Rafidah said companies such as Inokom and Hyundai should work
together to make Malaysia a regional hub.

Malaysia is among the top four auto markets in ASEAN, along
with Thailand, the Philippines and Indonesia.

But analysts have said Malaysia is losing out to Thailand,
which has emerged as the regional manufacturing base in Southeast
Asia due to its lower costs and liberal investment rules.

Thailand allows foreign manufacturers to hold 100 percent
ownership, compared to Malaysia which has set a 51 percent
ceiling and stipulates the involvement of a local partner, one
industry observer said.

Thailand is expected to lead other regional producers by
assembling 940,000 vehicles -- or 48 percent of regional
production -- in 2006.

Malaysia said Monday it will cut tariffs on imported cars from
Southeast Asian countries from next year but will offset the
reductions with higher excise duties.