Building Technological Capabilities
of Local Auto Parts Firms Under
Contrasting Industrial Policies:
A Comparative Study of Malaysia
& Thailand 1960-2000

By Kamaruding Abdulsomad
December 2003
Almqvist & Wiksell International
ISBN: 91-22-02027-6
310 pages, Illustrated, 6" x 8 "
$79.50 Paper Original


This book deals with the technological capability (TC) of local auto parts firms in Malaysia & Thailand. During the 1960s and 1970s, both countries had similar patterns of automobile industry development and achieved comparable industrial development.

Automobile industry development in both countries became distinctively different when the Malaysian government established the national car project, Proton, a joint venture between a Japanese automaker and a state enterprise HICOM in the mid-1980s, while Thailand has maintained its liberal economic policy and relies on foreign multinational automakers to operate in the country.

The indigenous Malay or Bumiputera have been encouraged to set up auto parts firms through various government measures to promote Bumiputera participation in the automobile sector. The focus of this study is an empirical survey of 41 and 42 local auto parts firms in Malaysia and Thailand respectively. As a result of different industrial policies, the characteristics of local auto parts firms differ in terms of the birth of the firms, ownership structure, technology transfer and the motive for setting up new firms.

In addition, large size local auto parts firms in both countries have achieved the highest stage of TC building. The findings indicate that large independent auto parts firms in Thailand have built strong minor change capabilities whereas the Malaysian large auto parts firms have relied on OEM production system.

Economic History
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