Malaysia offers incentives for small, energy-efficient car production

KUALA LUMPUR Mon Jan 20, 2014 3:05am EST

KUALA LUMPUR Jan 20 (Reuters) - Malaysia will issue licenses and incentives for manufacturers to make small, energy efficient cars in Southeast Asia's former auto hub, potentially benefiting Honda Motor Co Ltd and Nissan Motor Co Ltd who have operations there.

"We hope this National Automotive Policy (NAP) 2014 can enable us to become the energy efficient vehicle hub in ASEAN in the future," International Trade and Industry Minister Mustapa Mohamed told reporters at a news conference on Monday.

"We hope to raise total production volume to 1.25 million vehicles by 2020 from some 0.57 million vehicles," he said.

Malaysia was overtaken as Southeast Asia's automotive hub in the early 2000s by Thailand, which has followed a more open policy toward foreign car makers setting up factories and selling cars domestically.

In contrast, Malaysia has focused on developing domestic car makers Proton Holdings Bhd and Perusahaan Otomobil Kedua Sdn Bhd (Perodua). (Reporting by Yantoultra Ngui; writing by Niluksi Koswanage; Editing by Christopher Cushing)

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