An Overview of the Malaysian Motorcycle Market

2015
An Overview of
the Malaysian
Motorcycle Market
Prepared by: Industry Research Department
Cardas Research & Consulting Sdn Bhd
A-15-10 & A-15-12, 15th Floor, Menara A
Prima Avenue, Jalan PU 1/39, Dataran Prima, 47301 Petaling Jaya,
Selangor, Malaysia
Website: www.crcg.com.my
Enquiry: info@crcg.com.my
1
An Overview of the Malaysian Motorcycle Market
Table of Content
1.0 Executive Summary ............................................................................................. 4 2.0 Introduction ........................................................................................................ 5 3.0 Industry Conditions .............................................................................................. 7 3.1 Market structure ................................................................................................. 7 3.2 Barriers to market entry ....................................................................................... 8 4.0 Market overview & Key trends .............................................................................. 10 4.1 Industrial trends ................................................................................................ 10 4.2 Motorcycle Brands .............................................................................................. 13 4.3 Growth Potential ................................................................................................ 14 5.0 Industrial drivers and Challenges .......................................................................... 15 5.1 Industrial drivers ................................................................................................ 15 5.1.1 Export Growth ............................................................................................. 15 5.1.2 Value-added company................................................................................... 15 5.1.3 Financial Aid ................................................................................................ 15 5.2 Challenges ........................................................................................................ 16 5.2.1 Lack of human resource ................................................................................ 16 5.2.2 Price ........................................................................................................... 16 5.2.3 Motorcycle Safety Feature ............................................................................. 16 6.0 Main Industry Players .......................................................................................... 16 6.1 Company profiles ............................................................................................... 16 6.1.1 Motorcycle Dealers Holdings Sdn Bhd (MCDH) .................................................. 16 6.1.2 Hong Leong Yamaha Motor Sdn. Bhd (HLYM) ................................................... 17 6.1.3 MForce Bike Holdings Sdn. Bhd. ..................................................................... 17 6.1.4 Hicom-Honda Manufacturing Malaysia Sdn Bhd ................................................. 17 6.1.5 Motosikal dan Enjin Nasional Sdn Bhd (Modenas).............................................. 17 6.1.6 Armstrong Auto Parts Sdn Bhd (AAP) .............................................................. 18 7.0 Conclusion and opportunities ................................................................................ 18 8.0 References ......................................................................................................... 19 2
An Overview of the Malaysian Motorcycle Market
List of Charts
Chart
Chart
Chart
Chart
Chart
Chart
Chart
4.1:
4.2:
4.3:
4.4:
4.5:
4.6:
4.7:
Five year Malaysian GDP growth trend ........................................................................... 10
5 Year Domestic Sales Trend ........................................................................................ 10
Number of passenger vehicles & commercial vehicles produced ........................................ 11
5 years motorcycle export trends .................................................................................. 11
5 years motorcycle import trends ................................................................................. 11
5 years motorcycle production index trends ................................................................... 12
5 years average employment trends ............................................................................ 12
List of Tables
Table
Table
Table
Table
2.1:
3.1:
3.2:
4.1:
Motorcycle type and classification………………………………………………………………………………………………..6
Firms by classification .................................................................................................. 7
Five year number of motorcycle invovled in road accidents ................................................ 8
Motorcycle brands produced and assembled in Malaysia…………………………………………………………..13
List of Figures
Figure 3.1: Motorcycle industry structure ........................................................................ 7
Figure 3.2: Porter Five Force Model for Malaysian motorcycle industry………………………………………7
Figure 3.3: Five year number of motorcycle involved in road accidents……………………………………8
3
An Overview of the Malaysian Motorcycle Market
2.0 Introduction
The Malaysian motorcycle industry is growing
steadily on year-on-year basis as more Malaysians
prefer to ride a motorcycle due to cheaper
transportation cost and faster travelling time. The
motorcycle industry was first introduced to the
local market in mid - 1970’s, when Honda and
Yamaha starts to manufacture locally assembled
motorcycle to cater for the domestic market. The
industry had a steady growth over the years, with
more assembly and manufacturing plant were
operating in the country.
Malaysian riders chose to own a motorcycle
because motorcycle consumes less petrol and uses
less space for parking, which is the main problem
for Malaysians who work in the capital. Motorcycle
also reduces travelling time as the chances of a
motorcycle to be trapped in a traffic jams are less
due to its smaller size and ability to maneuver
around cars and other type of vehicles. Usage of
motorcycle on Malaysian roads has seen constant
increase. The size of the automotive industry is
increasingly growing, with contributions of RM30
billion to the national GDP in 20131.
2.1 Historical development
Malaysia’s role in the motorcycle industry goes
back to the 1970’s, when Yamaha started to
assemble a completely-knocked-down (CKD) unit
in Malaysia. Yamaha’s first assembly plant was
located in Shah Alam, built to cater for motorcycle
demands for local industry 2 . The Malaysian
government initiative to develop the local
automotive industry has been the driver of foreign
motorcycle
manufacturers
to
set-up
local
manufacturing and assembly plant in Malaysia. The
growing demand for motorcycle also has been the
motivational drive for investors to invest in the
domestic motorcycle industry.
The Malaysia initiative to develop the local
automotive industry has shown the creation of
Proton, the first local car manufacturer. After
observing the success of Proton, Perusahaan
Otomobil
Kedua
Sdn
Bhd
(Perodua)
was
established to further develop the automotive
industry.
Subsequent
to
the
success
of
manufacturing local cars to the local market, the
government launched a project to develop a
national motorcycle brand, and formed Syarikat
Motosikal dan Enjin Nasional Sdn Bhd (Modenas).
The company is jointly owned by Kawasaki, Sojitz,
Khazanah Nasional Bhd and DRB-HICOM3.
The third industrial master plan (IMP3) initiative
which focuses on developing Malaysia economy to
be an industrialized nation has attracted foreign
investors to the local industry. The initiative to
develop the local automotive industry by the
government has attracted more investments by
international motorcycle manufacturers to set-up
local assembly plant in the country, to cater for
domestic market and also for the ASEAN region.
2
1
Malaysia International Trade & Industry (MITI), 2014
HLYM official website: http://www.yamahamotor.com.my/index.php
3
Modenas official website:
http://www.modenas.com.my/v2about.asp
5
An Overview of the Malaysian Motorcycle Market
venture between Proton Edar Sdn Bhd and CIMB
Bank Bhd, is offering low interest rates to own a
Proton car, of between 2.6% up to 3.2%. RHB
Bank Bhd is offering interest rates of between
2.6% up to 3% per annum to consumers whose
purchasing vehicle 6 . This trend by banks and
financial institutions are further depriving the sales
volume of domestic motorcycle sales due to
consumers opting to purchase a car rather than
owning a motorcycle.
The recent revision of the national automotive
policy 2014 (NAP 2104), which focuses more on
the energy efficient vehicle (EEV) has seen the
domestic motorcycle sales continue to drop7. The
revised policy is focusing on the development for
passenger vehicle and commercial vehicle industry,
therefore the policy is giving investors options to
opting invest into the domestic automotive
industry, instead of investing to the development
of the motorcycle industry. The revision of NAP
2014 has open up possibilities for investors to
invest in Malaysia and the revised policy is looking
to ease up the long protective measure on the
automotive industry. However, the NAP 2014 will
still have elements to protect the local industry, as
local brand, Modenas is still incapable to match
with international brands product standard and
quality. If the protective measure continues to be
reduced, the local manufacturer future is looking
to be dimmed. This barrier contributes to the slow
growth of sales volume and the dip of the
motorcycle export industry.
The establishment of Motorcycle and Scooter
Assemblers
and
Distributors
Association
of
Malaysia (MASSAM) is to guide and monitor
motorcycle manufacturers and assemblers with the
NAP 2014 and also IMP3, in order to get the
industry in track with the objective of the policy.
The Malaysian government is encouraging for
Modenas to involve in more collaboration with
international companies to further develop the
local industry and to reduce the dependency
towards the protective measures implied by the
government8.
6
7
www.savemoney.my
Malaysian International Trade & Development (MITI),
2014
8
http://www.baikujapan.com/asia/malaysia
9