2 economists have cautioned the company which shall produce the latest national car of facing massive challenges, saying that success was uncertain.
Firdaos Rosli from the Institute of Strategic and International Studies said that the success of a company that manufactures automotive would depend on the quality as well as cost controls and also the management of vendors.
Yeah Kim Leng from the Sunway University Business School observed that DreamEDGE, the company which shall build the car, did not have any track record. He said that they were taking a huge risk in entering into a highly competitive arena.
Firdaos and Yeah were giving their opinions on the announcement that was made yesterday by DreamEDGE saying that they would manufacture the 3rd national car by collaborating with Daihatsu Motors from Japan, where the first model was expected to be launched in the year 2021. The company was targeting mass production by the year 2031.
Firdaos said that there was not much that they knew regarding the experience of the company or their track record in manufacturing.
He did acknowledge that collaborating with Daihatsu could help in cost-saving, however, he also said that the venture would require economies of scale to be practical and that DreamEDGE would also have to export their cars as the domestic market was way too small.
He said that even Perodua, which was the most successful car company of the country, would eventually have to export their cars. Their sales growth currently is not as fast as that of the Japanese brands,
He said that this meant that Malaysia had to sign further free trade agreements or at least deepen the already existing agreements.