Tuesday, April 04, 2017

I attended the International Automotive Aftermarket Conference by MAI and here are my thoughts about that as well as the industry as a whole


I was privileged to attend the second International Automotive Aftermarket Conference organised by the Malaysia Automotive Institute (MAI) earlier today. “Spearheading Technology, Enhancing Automotive Aftermarket Industry” This one-day international conference attracted 100 participants, consisting of local and international industry stakeholders, academia, automotive recycling associations, and Government agencies. 


L to R - Mr Sameer Pathak - CEO, PETAINA GROUP Ltd, Dato' Madani Sahari - CEO, MAI, Mr. Sosho Kitajima - President JARA Corp., Mr Tony Lau - GM, Everspark Industries Sdn Bhd.

MAI has brought together guest speakers and panelists from Japan, the UK as well as locally. These are industry experts with extensive knowledge and expertise in the automotive aftermarket, to share their experiences with the audience. The aim is to enhance the importance and awareness of automotive aftermarket to relevant stakeholders. The main topics of discussions were Mobility Solutions in Automotive Aftersales and Services, the 4R (Repair, Reuse, Recycle, Remanufacture) and 2S (Service, Spare Parts) Standards, Automotive Recycling in various countries, and current and future Market Outlooks for Remanufactured Parts and Components. Aside from that, there was a portion of the session that discussed efforts in reducing vehicle theft in the United Kingdom and whether it could be applicable here in Malaysia.

I managed to catch the talk by the Japanese Speaker, Mr Sosho Kitajima, President of JARA Corporation on the overview of the Japanese recycling business. 

He talked on how things were done in Japan (especially over the last decade - see photo above) when it came to disposing of vehicles and the state of the industry at this point of time. He gave one example where a 1100kg sedan could give over 740kgs of useful parts that can be reused and recycled. This is how much stuff can be recycled by the Japanese from a typical compact sedan. 


Aside from that, another interesting fact is that with more electric vehicles on the roads, it will actually give rise to a different set of recycling needs. There are so little mechanical parts in an EV that no much can be reused (note that an EV has only electric motors and batteries - no other major components like starter motors, alternators, aluminium bits from the engine, etc). 

I have to note that another interesting topic is the End Of Life Vehicle roadmap. 

ELV or voluntary vehicle scrapping which will also enhance the level of reuse and of recycling vehicle parts. Whilst it was mentioned by Dato' Madani Sahari, CEO of MAI, that Malaysia isn't ready for this in the near future, we may see it happening in the near future when regulatory bodies as well as insurers would want to make sure that a vehicle is roadworthy before allowing it on the roads. This is a certainty in the distant future, much like the MOT certification in the UK where cars have to be tested regularly for roadworthiness. 

So the upside of this would be to the recycling industry. At this moment, let's not worry about this as it is still quite far away from what I gather. Right now, the only people facing problems are the remanufacturing industry here in Malaysia. Whilst our remanufactured products like alternators and starter motors have export levels of quality (until people in the Middle East are putting fake 'Made in Malaysia' parts on starter motors), the problem is sourcing parts for the remanufacturing process. Right now, according to Mr Tony Lau of Everspark Industries Sdn Bhd, the company has to source from abroad - Japan, USA and even Europe. 

Surprisingly, this is a booming industry if I were to just put it in simple terms. 

In 2016, RM513 million worth of Remanufactured parts and components were exported from Malaysia, and is expected to increase to RM750 million for 2017. Even the Speakers do not dispute this fact. With this I must say that whilst there are some industries in Malaysia that are struggling, I do not really believe the automotive industry is badly affected by the supposed economic turmoil facing our country.

Actually, let's summarise a little. Last year Mercedes-Benz, BMW, Perodua, Volvo Trucks, Hino, Isuzu posted record numbers in terms of new vehicle sales. Proton also picked up steam too. Porsche has also stated that one of the key markets in S.E.A is Malaysia. According to what I heard, some ultra-luxury car buyers are made up of new money. This means over 30 people, who aren't old towkays or royalty bought ultra-luxury cars here in Malaysia. New Money. 

2016 also marked close to a billion Ringgit worth of investments overall in the automotive industry. New showrooms, 3S, 4S centres, training academies, headquarters, engine and transmission factories were officially launched. This meant that more jobs were created last year. More people underwent training too. More people in the automotive industry overall. I also met people with a few years of experience under their belt finding jobs easily within the industry. 

Then another simple fact. If the economy was so bloody bad, everyone shouldn't be booking the Honda BRV 7 seater SUV over the other budget MPV/SUVs like the Proton Ertiga and the Perodua Alza. Hello, you guys are saying the economy's bad, yet you are willing to pay RM85,000 for a B segment MPV/SUV instead of a RM55,000 rival. Record number of bookings too I might add. Tons of Civics out there too. Everywhere. The economy is so bad that I see more of these on the roads than the Proton Saga.

MAI has also forecasted more jobs in the automotive industry for 2017. By about 20,000 jobs more or less (I forgot the exact number but it was in the tens of thousands). Then I also heard at a launch event that a logistics company, which operates over 500 trucks intend to have a fleet of 700 by the end of this year. This company supplies convenience stores peninsular-wide. So this is a phenomenon of sorts. Jobs are actually being created. There is human capital growth too. And the actual sales figures show a robust economy. If there is going to be a slow down, it ain't really happening at this moment. If there were a slowdown, I'd say that things are still moving along at a decent pace. Maybe from 5th gear down to 3rd. There is still progress.

And you should have seen the over 100 participants from various aftermarket industry players. And their cars. 

PRESS RELEASE
INTERNATIONAL AUTOMOTIVE AFTERMARKET CONFERENCE

The Malaysia Automotive Institute (MAI) has organised the first edition of the International Automotive Aftermarket Conference with the theme “Spearheading Technology, Enhancing Automotive Aftermarket Industry” on the 4th of April 2017.

This one-day international conference attracted 100 participants, consisting of local and international industry stakeholders, academia, automotive recycling associations, and Government agencies. MAI has brought together a group of renowned Speakers and panelists from around the world, with extensive knowledge and expertise in the automotive aftermarket, to share their experiences with the audience. The aim is to enhance the importance and awareness of automotive aftermarket to relevant stakeholders.

This year, the International Automotive Aftermarket Conference focused on key issues such as Mobility Solutions in Automotive Aftersales and Services, the 4R (Repair, Reuse, Recycle, Remanufacture) and 2S
(Service, Spare Parts) Standards, Automotive Recycling in various countries, and current and future Market Outlooks for Remanufactured Parts and Components.

This Conference is aligned with the Malaysia Automotive Remanufacturing Roadmap (MARR) of the National Automotive Policy 2014, which outlines Malaysia’s plans to promote automotive parts remanufacturing as an emerging industry, which will drive and transform Malaysia as the hub for automotive remanufacturing activities.

“With an existing resilient automotive manufacturing base, coupled with a matured automotive parts recycling industry, Malaysia has the potential to build a strong automotive parts remanufacturing industry”, said MAI Chief Executive Officer Dato’ Madani Sahari.

He added that in 2016, RM513 million worth of Remanufactured parts and components were exported from Malaysia, and is expected to increase to RM750 million for 2017.

“A higher number of local companies are entering this industry, with more than 300 companies identified as remanufacturers in 2016” said Madani.

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