Published on: 2025-09-10

Intelligence Report: MITI finalising New Customised Incentive Mechanism – Paul Tan’s Automotive News

1. BLUF (Bottom Line Up Front)

The Ministry of International Trade and Industry (MITI) is finalizing a New Customised Incentive Mechanism (NCM) aimed at enhancing Malaysia’s automotive sector, particularly in electric vehicles (EVs). The most supported hypothesis suggests that the NCM will bolster Malaysia’s position as a regional automotive hub by aligning with global mobility trends. Confidence Level: Moderate. Recommended Action: Monitor the implementation of the NCM and assess its impact on the automotive market and regional competitiveness.

2. Competing Hypotheses

Hypothesis 1: The NCM will successfully create a transparent and fair tax incentive system that attracts significant automotive investment, positioning Malaysia as a regional leader in EV production.
Hypothesis 2: The NCM may face implementation challenges, resulting in limited impact on investment and failing to significantly alter Malaysia’s automotive standing in the region.

3. Key Assumptions and Red Flags

Assumptions:
– The NCM will be effectively implemented without bureaucratic delays.
– Global automotive trends will continue to favor EVs, providing a conducive environment for Malaysia’s ambitions.

Red Flags:
– Potential resistance from established automotive players who may perceive the NCM as a threat to their market position.
– Lack of detailed information on how the NCM will be operationalized and measured for success.

4. Implications and Strategic Risks

The successful implementation of the NCM could enhance Malaysia’s economic standing and technological capabilities, reducing dependency on petrol and fostering innovation. However, failure to implement effectively could lead to wasted resources and missed opportunities, weakening Malaysia’s competitive edge in the automotive sector. Geopolitically, Malaysia’s enhanced position could shift regional dynamics in automotive trade.

5. Recommendations and Outlook

• Monitor the development and execution of the NCM to ensure alignment with stated objectives.
• Engage with stakeholders to address potential resistance and ensure broad support.
• Scenario Projections:
  • Best Case: Malaysia becomes a leading EV hub in ASEAN, attracting significant foreign investment.
  • Worst Case: The NCM fails to deliver, leading to a stagnation in automotive innovation and investment.
  • Most Likely: Moderate success with gradual improvements in the automotive sector’s competitiveness.

6. Key Individuals and Entities

– Tengku Datuk Seri Zafrul Abdul Aziz
– Malaysia Automotive, Robotics and IoT Institute (MARii)

7. Thematic Tags

national security threats, regional focus, economic development, automotive industry, electric vehicles