Spare part makers told to merge

KUALA LUMPUR: Malaysian manufacturers of auto components should consider merging so they can compete better with foreign firms as Southeast Asia liberalizes its trade, the government said on Monday.

"While the government continues to encourage small and medium- scale players, there may also be a need to consider steps to consolidate among the many vendors in the automotive industry," Deputy Prime Minister Najib Razak said in a speech at an automotive industry conference.

Najib said such mergers might help local companies "gain scale, financial strength and managerial talent to expand internationally."

Most auto component manufacturers rely heavily on supplying parts to Malaysia's two national car makers, Proton Holdings Bhd. and Perusahaan Otomobil Nasional Kedua Sdn. Bhd, or Perodua. -- AP