PETALING JAYA: KHPT Holdings Bhd has proposed three measures to the government for Budget 2026 aimed at strengthening local automotive parts producers and establishing a more integrated growth pathway for Malaysia’s automotive industry.

The company, which is principally involved in manufacturing and sale of automotive parts and components, put forward three proposals – one, tax incentives to reduce the cost of investment; two, policy reforms to provide stability and confidence for long-term planning; and. three, digitalisation to ensure that SMEs and mid-tier firms can become globally competitive suppliers.

KHPT Holdings group managing director Datin Eloise See said the outcome is a future-ready industry that strengthens Malaysia’s electric vehicle (EV) ambitions, boosts exports, creates high-value jobs, and positions the nation as a serious regional hub for advanced automotive and EV manufacturing.

Elobarting on the proposed tax incentives to support growth and investment, See said the domestic automotive manufacturing industry has always been capital-intensive.

She said from tooling and stamping equipment to welding robotics, testing machines and quality control systems, constant reinvestment is necessary to keep production lines efficient and internationally competitive.

For SMEs and mid-tier suppliers, these costs often present a significant barrier, especially in an environment of rising raw material prices and currency pressures.

“Targeted tax incentives would provide much-needed relief, making it easier for companies to reinvest in equipment, processes, and training without compromising cash flow. With such incentives, Malaysian suppliers can upgrade to advanced production systems, improve efficiency, and adopt new technologies like EV component manufacturing.

“These measures would not only reduce the risk of local players being outcompeted by imports but also attract private-sector reinvestment into Malaysia’s automotive ecosystem. In turn, the multiplier effects, from job creation to stronger supply chains, will be felt across the broader economy,“ See said.

Secondly, on policy reforms to strengthen industry competitiveness, See said Malaysia’s automotive players need a stable and predictable policy environment to plan long-term investments.

“A clearly defined roadmap for EVs is critical to give global OEMs, local suppliers, and investors the confidence to commit to Malaysia as a regional hub. At the same time, the government can help by streamlining business approvals and permits, which often add unnecessary delays and costs for SMEs.

“Simplified processes would allow companies to move faster in adapting to new demands, especially in areas like EV battery systems, lightweight materials, and green mobility solutions.”
See said policy reforms should also encourage greater collaboration between local suppliers and multinational Tier-1 manufacturers, ensuring Malaysian SMEs can integrate into global value chains.

“Just as importantly, local businesses will need support to meet international standards for quality, safety, and ESG compliance so that they can compete effectively with peers in Thailand, Vietnam, and Indonesia.

“By strengthening the overall competitiveness of the sector, Malaysia can position itself as a serious regional player in the age of electrification and digital mobility.”

Furthermore, See noted that support for digitalisation and automation is no longer optional but a necessity, as many Malaysian SMEs still struggle with the high upfront costs.

She stressed that Budget 2026 could be “transformative” if it provides targeted grants, financing schemes, or shared-facility programmes to help firms automate production, adopt digital monitoring, and upskill workers.

“Such measures would lift productivity, reduce reliance on manual labour and open access to higher-precision EV supply chains, ultimately moving Malaysia up the value chain in line with Industry4WRD and MyDigital,“ See said.

The outcome is a future-ready industry that strengthens Malaysia’s EV ambitions, boosts exports, creates high-value jobs, and positions the nation as a serious regional hub for advanced automotive and EV manufacturing, she added.

 Business