A Study on Supply and Demand of Technical and Vocational Education and Training (TVET) Workforce in Automotive Aftermarket Industry

A STUDY ON SUPPLY AND DEMAND OF TECHNICAL AND VOCATIONAL
EDUCATION AND TRAINING (TVET)

WORKFORCE IN AUTOMOTIVE AFTERMARKET
INDUSTRY

JABATAN PEMBANGUNAN KEMAHIRAN MALAYSIA AUTOMOTIVE, ROBOTICS
KEMENTERIAN SUMBER MANUSIA & IOT INSTITUTE (MARII)
Department of Skills Development
Ministry of International Trade and
Ministry of Human Resources, Malaysia Industry, Malaysia

First Printing 2020
Copyright Department of Skills Development

Ministry of Human Resources Malaysia

All rights reserved. No part of this publication may be
reproduced or transmitted in any form or by any means,
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information storage and retrieval system, without permission in
writing from Department of Skills Development (JPK).

Published in Malaysia by
Department of Skills Development (JPK)

Ministry of Human Resources
Level 7-8, Blok D4, Complex D
Federal Government Administrative Centre

62530 Putrajaya, Malaysia
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Perpustakaan Negara Malaysia Cataloguing-in-Publication Data

A Study on Supply and Demand of Technical and
Vocational Education and Training (TVET)
Workforce in Automotive Aftermarket Industry
ISBN 978-967-2393-13-9

Table of Contents

ABSTRACT ....................................................................................................................... i

ABSTRAK .........................................................................................................................ii

ACKNOWLEDGEMENTS.................................................................................................iii

LIST OF FIGURES ...........................................................................................................vi

LIST OF TABLES.............................................................................................................xi

LIST OF ABBREVIATIONS............................................................................................xiii

LIST OF APPENDICES.................................................................................................xvii

1 INTRODUCTION..................................................................................................1

1.1 Problem Statement...............................................................................................3
1.2 Objectives ............................................................................................................6
1.3 Research Scope and Limitations ..........................................................................7

2 LITERATURE REVIEW .......................................................................................9

2.1 Global Overview of the Automotive Industry .........................................................9
2.2 Automotive Industry in Malaysia .........................................................................10
2.3 COVID-19 Outbreak Influences ..........................................................................19

3 METHODOLOGY...............................................................................................23

3.1 Research Flowchart ...........................................................................................23
3.2 Data Requirement Analysis ................................................................................29
3.3 Automotive Aftermarket Research Coverage Regions........................................35
3.4 Supply Analysis..................................................................................................38

4 FINDINGS AND DISCUSSIONS ........................................................................47

4.1 Sample for Demand Data Analysis.....................................................................47
4.2 Sales of Motor Vehicles (MSIC G451) ................................................................48
4.3 Maintenance and Repair of Motor Vehicles (MSIC G452) ..................................57
4.4 Sales of Motor Vehicle Parts and Accessories (MSIC G453)..............................73
4.5 Sales, Maintenance, and Repair of Motorcycles and Related Parts and

Accessories (MSIC G454) ..................................................................................78
4.6 MSIC E383 and MSIC C293 Sections ................................................................89
4.7 Other Service Activities (MSIC S960) .................................................................95
4.8 Benchmarking Programme.................................................................................98
4.9 Programme Evaluation.....................................................................................115
4.10 Supply Analysis................................................................................................120
4.11 Key Challenges ................................................................................................130
4.12 Gap Analysis....................................................................................................132
4.13 Recommendations and Action Plans................................................................138

5 CONCLUSION .................................................................................................163

5.1 Conclusion .......................................................................................................163
5.2 Recommendation for Future Study...................................................................167

REFERENCES ..............................................................................................................168

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i

ABSTRACT

Since the first national car production in 1985, automotive industry has become one of Malaysia's most
significant contributors to its economy with a strong automotive ecosystem. In 2019, this industry has
contributed RM40 billion or 4.3% of the country’s GDP with over 600 automotive suppliers and vendors,
1000 aftermarket workshops and dealers, as well as nearly 65,388 new workforces were created in the
manufacturing and aftermarket sector. Feedback from industry players, however, stating that there is a
shortage of skilled workforce in the aftermarket sector, along with a lack of clear information on the
aftermarket industry challenges to cope with the industry requirement, apart from the facilities provided
in the educational institutions are not in line with the technology used in the industries today. Moreover,
most TVET institutions only focus on one aftermarket sub-section; maintenance and repair services.
Therefore, this study aims to identify the gap between the supply and demand of TVET workforce by
evaluating the existing TVET programmes and determining the industry's technical competencies, new
skills, and job positions required by the industry. The study also aims to project the supply and demand
of skilled workforce from the year 2021 to 2025, discover the best governance practices related to
collaboration between government and industry, then come out with the recommendations to improve the
current programmes while fulfilling the workforce demand. This study was conducted in four phases,
beginning with the preparation of questionnaire, followed by industry engagement, survey consultation,
and comparative study of workforce supply and demand. More than 800 companies and TVET institutions
were involved in this study. The supply analysis covered respondents from TVET institutions accredited
by the Ministry of Human Resources, and the Ministry of Higher Education. Data obtained from the survey
were analysed using a statistical method to evaluate the current industry scenario, forecast the
workforce's demand for the next five years, and evaluate the quality of the human capital produced by
the training institutions. The study discovered that the current TVET workforce supply is still insufficient
to cater the demand for the next five years, except for maintenance and repair of motor vehicles technician
and sales and service personnel. For the remanufacturing section, the current practice is not up to the
industrial standard. Most industry players reported that the major employment challenge is about
adapting to the advanced technology, where the advance maintenance and repair skill sets are
essentials. Good interpersonal soft-skill and talented at convincing customers are the most favourable
characteristics to become the sale personnel. Proficient in e-commerce and digital marketing will be the
value-added to the sale personnel to meet the customer expectations in the digital era. SLDN is a good
practice to produce the industry-ready workforce. However, the implementation is still not well-received
among the industry players due to several factors related to promotional strategies and incentive provided
by the government. To overcome the undersupply of the workforce and meet the skills required by the
industry, the five years’ time-frame action plan has been recommended at the end of this study.

ii

ABSTRAK

Sejak pengeluaran kereta nasional pertama pada tahun 1985, industri automotif telah menjadi salah satu
penyumbang terpenting kepada ekonomi Malaysia melalui ekosistem automotif yang kukuh. Pada tahun
2019, industri ini merupakan penyumbang kepada RM40 bilion atau 4.3% Keluaran Dalam Negara Kasar
(KDNK) dengan lebih dari 600 pembekal dan vendor automotif, 1000 bengkel dan peniaga selepas
jualan, serta hampir 65,388 tenaga kerja baru diwujudkan dalam sektor pembuatan dan pasaran selepas
jualan. Namun, daripada maklum balas pemain industri, masih terdapat kekurangan tenaga kerja mahir
di sektor selepas jualan, kurang informasi yang jelas mengenai cabaran industri selepas jualan bagi
memenuhi keperluan industri, juga kemudahan yang disediakan di institusi pendidikan adalah tidak selari
dengan teknologi yang digunakan oleh industri masa kini. Tambahan lagi, kebanyakan institusi TVET
hanya menumpukan pada satu sub-bahagian dalam sektor selepas jualan; perkhidmatan
penyelenggaraan dan pembaikan. Oleh itu, kajian ini dijalankan bertujuan untuk mengenal pasti jurang
antara penawaran dan permintaan tenaga kerja TVET melalui penilaian program TVET sedia ada serta
penelitian kompetensi teknikal industri, kemahiran baru, dan jawatan pekerjaan yang diperlukan oleh
industri. Kajian ini juga bertujuan untuk menghasilkan ramalan penawaran dan permintaan tenaga kerja
mahir bagi tahun 2021 hingga 2025, mengenal pasti amalan tadbir urus terbaik berkaitan kerjasama
kerajaan dan industri, seterusnya menghasilkan saranan bagi menambah baik program sedia ada bagi
memenuhi keperluan tenaga kerja. Kajian ini berlangsung dalam empat fasa, bermula dengan
penyediaan soalan kaji selidik, diikuti lawatan industri, soal selidik kajian, dan perbandingan data
penawaran dan permintaan tenaga kerja. Lebih daripada 800 syarikat dan institusi TVET terlibat dalam
kajian ini. Analisis penawaran meliputi responden dari institusi TVET yang diakreditasi oleh Kementerian
Sumber Manusia, dan Kementerian Pengajian Tinggi. Data yang diperoleh daripada kaji selidik dianalisis
menggunakan kaedah statistik untuk menilai senario industri masa kini, meramalkan permintaan tenaga
kerja untuk lima tahun akan datang, dan menilai kualiti modal insan yang dihasilkan oleh institusi latihan.
Kajian mendapati bahawa bekalan tenaga kerja TVET masa kini tidak mencukupi untuk menampung
permintaan lima tahun akan datang, kecuali untuk juruteknik penyelenggaraan dan pembaikan
kenderaan bermotor dan kakitangan jualan dan perkhidmatan. Untuk bahagian pembuatan semula,
amalan semasa yang digunakan tidak bersesuaian dengan piawaian industri. Kebanyakan pemain
industri menyatakan cabaran utama dalam pekerjaan adalah berkaitan adaptasi teknologi moden, di
mana set kemahiran berkaitan penyelenggaraan dan pembaikan moden adalah penting. Kemahiran
insaniah meliputi personaliti dalaman yang baik dan berbakat dalam meyakinkan pelanggan adalah ciri
utama bagi juru jual. Mahir dalam e-perdagangan dan pemasaran digital adalah nilai tambah kepada juru
jual bagi memenuhi kehendak pelanggan era digital. SLDN adalah amalan yang baik untuk menghasilkan
tenaga kerja sedia industri. Namun, pelaksanaannya masih tidak sepenuhnya diterima dengan baik oleh
pemain industri disebabkan beberapa faktor melibatkan strategi promosi dan insentif yang diberikan oleh
kerajaan. Untuk mengatasi kekurangan tenaga kerja dan memenuhi kemahiran yang diperlukan oleh
industri, saranan berbentuk pelan tindakan lima tahun telah disediakan di akhir kajian ini.

iii

ACKNOWLEDGEMENTS

JPK and MARii (as an Industry Lead Body in Automotive Sector) would like to acknowledge the
Ministry of Human Resources and the Ministry of International Trade and Industry for the support in
the completion of this study. Sincere appreciation and gratitude are conveyed to other government
and non-government agencies for the human capital and statistical data provided throughout this
study. To the industry panel experts, special thanks are dedicated for the feedback and advice
regarding actual automotive aftermarket scenario industry in Malaysia. JPK and MARii would also
like to express the sincere appreciation to the main contributors in the list provided below and to the
individuals whose time and effort contributed to the publication of this report.

RESEARCH COMMITTEE

1. Ms. Faizah Binti Harun Director (Strategic Partnership Division, JPK)
2. Ms. Nurhayati Binti Niaz Ahmad Principal Assistant Director
3. Ms. Norisniwati Binti Ab. Rahim (Strategic Partnership Division, JPK)
4. Mr. Mohd Nizam Bin Saad Principal Assistant Director
5. Ms. Hairul Nishak Binti Ahmad (Planning, Research & Development Division, JPK)
Senior Assistant Director
6. Mr. Azhar Bin Taib (Strategic Partnership Division, JPK)
7. Mr. Fazirul Nizar Bin Dzulkifli Senior Assistant Director
8. Ms. Ayu Hazwani Binti Ramman (Strategic Partnership Division, JPK)

Deputy Chief Executive Officer (MARii)
Deputy Head of Department,
(Human Capital Development – Aftermarket, MARii)
Assistant Executive,
(Human Capital Development – Aftermarket, MARii)

iv

STEERING COMMITTEE

Chairman: Ts. Zaihan Bin Shukri Director General

Members:

1. Dr. Mohd Rashid Bin Buyong Hamzah Deputy Director General (Operation)

2. Mr. Suimi Bin Abd Majid Deputy Director General (Development)

3. Dr. Mohamad Bin Sulaiman Director (CIAST)

4. Dr. Aruna Binti Ismail @ Abd Wahab Director (SLDN)

5. Mr. Mohd Sukri Bin Ismail Director (MOSQ)

6. Ms. Faizah Binti Harun Director (BKS)

7. Ms. Zuleah Binti Darsong Director (PMO)

8. Dr. Mohd Faizal Bin Tokeran Director (P&KS)

9. Dr. Ghalip Bin Spahat Director (NOSS)

10. Ms. Molinda Binti Abd Rahman Director (PPP)

11. Dr. Ruminah Binti Muhammad Zain Director (JPK Wilayah Tengah)

12. Mr. Abdul Halim Bin Hasan Director (JPK Wilayah Selatan)

13. Ms. Wan Fadzilah Binti Wan Dagang Director (JPK Wilayah Timur)

14. Mr. Mohd Azmir Bin Ahmad Director (JPK Wilayah Utara)

15. Ts. Mohd Azmi Bin Pelah Director (JPK Wilayah Sabah)

16. Mr. Sudirman Bin Suratin Director (JPK Wilayah Sarawak)

TECHNICAL COMMITTEE Deputy Director General (Development)

Chairman: Mr. Suimi Bin Abd Majid Deputy Director (CIAST)
Deputy Director (MOSQ)
Members: Deputy Director (SLDN)
Deputy Director (PMO)
1. Mr. Jamil Bin Yahya Deputy Director (PPP)
2. Ms. Shamsida Binti Zainal Abidin Principal Assistant Director (NOSS)
3. Mr. Samsuri Bin Arif Principal Assistant Director (BKS)
4. Mr. Mohd Faisal Bin Abdul Hamid Principal Assistant Director (P&KS)
5. Ms. Meena a/p Ramalingam Senior Assistant Director (JPK Wilayah Tengah)
6. Dr. Zool Hilmi Bin Mohamed Ashari
7. Ts. Yuslan Bin Yasok
8. Ms. Siti Rom Binti Darman
9. Ts. Wan Sulaiman Bin Md Daud

v

INDUSTRY PANEL

1. Mr. Cho Chee Seng Director/General Manager
2. Mr. Cheah Wing Yew (Sendok Taihei Sdn. Bhd.)
3. YM Tengku Hazif Tengku Mansor Advisor, After Sales
4. Mr. Muhammad Eezam Bin Masripan (Bermaz Motor Trading Sdn. Bhd.)
Section Head International, After-Sales
Training (Proton Holdings Bhd.)
Chief Executive Officer
(Techniker Expert Sdn. Bhd.)

RESEARCH TEAM

1. Dr. Mohammad Zulafif Bin Rahim Research Director, Author (UTHM)

2. Ts. Dr. Mohd Fadhli Bin Zulkafli Research Manager, Author (UTHM)

3. Dr. Siti Juita Mastura Binti Mohd Saleh Lead Researcher, Author (UTHM)

PROOFREADER Founder of Proofreaders United
1. Mr. Muhammad Zaki Bin Ramli

vi

LIST OF FIGURES

Figure 1-1: Breakdown of JPK NOSS and MQA Programmes by MSIC Sections ........5
Figure 2-1:
Global Overview of Vehicle Sales (Ministry of International Trade and
Figure 2-2: Industry, 2020a)..........................................................................................9

Figure 2-3: Automotive Industry Snapshot 2019 (Malaysia Automotive Robotics and IoT
Institute, 2019)..........................................................................................10
Figure 2-4: National Automotive Policy (NAP) 2006–2020 (Ministry of International
Figure 2-5: Trade and Industry, 2020a) ......................................................................12

Figure 2-6: The Automotive Industrial Ecosystem ......................................................13
Figure 2-7:
NAP 2020 Roadmaps and Blueprints (Ministry of International Trade and
Figure 2-8: Industry, 2020b)........................................................................................16

Figure 3-1: The Aftermarket Ecosystem .....................................................................17

Figure 3-2: Total Job Creation for Manufacturing and Aftermarket 2014-2019 (Malaysia
Automotive Robotics and IoT Institute, 2019) ...........................................18
Figure 3-3:
Figure 3-4: Effects of COVID-19 Outbreak on Automotive Manufacturing and Supply
Figure 3-5: Chains (Markit, 2020) ..............................................................................20
Figure 3-6:
Figure 4-1: Distribution of the Aftermarket Sub-Sectors by MSIC Codes (APEC, 2015;
Figure 4-2: DOSM, 2019; and MOT, 2020).................................................................30
Distribution of Workforce by MSIC G451–G454 (Principal Statistics of
Figure 4-3: Services Sector, Second Quarter 2020, DOSM) ......................................32

Figure 4-4: Statistical Formula and Confidence Interval Illustration ............................34

Figure 4-5: West Malaysia ..........................................................................................35

East Malaysia ...........................................................................................36
Percentage of respondents’ breakdown per state and MSIC section .......37

Percentage of Survey Conducted.............................................................48

Distribution of job positions in Sales and Marketing category (Micro-sized
companies) ...............................................................................................49

Distribution of job positions in Sales and Marketing category (Small-sized
companies) ...............................................................................................50

Distribution of job positions in Customer Service and Dealer Development
category (Small-sized companies)............................................................50

Education background for Sales and Marketing category (Micro-sized
companies) ...............................................................................................51

vii

Figure 4-6: Education background for Sales and Marketing category (Small-sized
Figure 4-7: companies) ...............................................................................................52
Figure 4-8:
Figure 4-9: Education background for Customer Service and Dealer Development
Figure 4-10: category (Small-sized companies)............................................................52
Figure 4-11:
Figure 4-12: Salary for Sales Personnel by job positions (MSIC G451) .......................53
Figure 4-13:
Figure 4-14: Salary for Marketing Personnel by job positions (MSIC G451).................53
Figure 4-15:
Figure 4-16: Salary for Customer Service by job positions (MSIC G451) .....................54
Figure 4-17:
Figure 4-18: Required workforce for Sales and Marketing category by year 2025 (Micro-
Figure 4-19: sized companies)......................................................................................55
Figure 4-20:
Figure 4-21: Required workforce for Sales and Marketing category by year 2025 (Small-
Figure 4-22: sized companies)......................................................................................56
Figure 4-23:
Figure 4-24: Required workforce for Service and Dealer Development category by year
Figure 4-25: 2025 (Small-sized companies) .................................................................56
Figure 4-26:
Distribution of job positions in Sales and Services category (Micro-sized
companies) ...............................................................................................58

Distribution of job positions in Sales and Services category (Small-sized
companies) ...............................................................................................58

Distribution of job positions in Sales and Services category (Medium-sized
companies) ...............................................................................................59

Distribution of job positions in Technician category (Micro-sized companies)
.................................................................................................................60

Distribution of job positions in Technician category (Small-sized companies)
.................................................................................................................60

Distribution of job positions in Technician category (Medium-sized
companies) ...............................................................................................61

Education background for Sales and Services category (Micro-sized
companies) ...............................................................................................62

Education background for Sales and Services category (Small-sized
companies) ...............................................................................................62

Education background for Sales and Services category (Medium-sized
companies) ...............................................................................................63

Education background for Technician category (Micro-sized companies) 63

Education background for Technician category (Small-sized companies)64

Education background for Technician category (Medium-sized companies)
.................................................................................................................64

Salary for Sales and Services personnel by job positions (MSIC G452) ..69

viii

Figure 4-27: Salary for Master/ Diagnostic Technicians and Supervisors (MSIC G452)
Figure 4-28: .................................................................................................................69
Figure 4-29:
Figure 4-30: Salary for Senior Technicians and Technicians (MSIC G452)..................70
Figure 4-31:
Figure 4-32: Required workforce for Sales and Services category by year 2025 (Micro-
Figure 4-33: sized companies)......................................................................................71
Figure 4-34:
Figure 4-35: Required workforce for Sales and Services category by year 2025 (Small-
Figure 4-36: sized companies)......................................................................................71
Figure 4-37:
Figure 4-38: Required workforce for Technician category by year 2025 (Medium-sized
Figure 4-39: companies) ...............................................................................................72
Figure 4-40:
Figure 4-41: Required workforce for Technician category by year 2025 (Micro-sized
Figure 4-42: companies) ...............................................................................................72
Figure 4-43:
Figure 4-44: Required workforce for Technician category by year 2025 (Small-sized
Figure 4-45: companies) ...............................................................................................72
Figure 4-46:
Required workforce for Technician category by year 2025 (Medium-sized
companies) ...............................................................................................73

Distribution of job positions for Vehicle Parts and Accessories Sales
category (Micro-sized companies)............................................................74

Distribution of job positions for Vehicle Parts and Accessories Sales
category (Small-sized companies)............................................................74

Education background for Vehicle Parts and Accessories Sales category
(Micro-sized companies)...........................................................................75

Education background for Vehicle Parts and Accessories Sales category
(Small-sized companies) ..........................................................................75

Salary for Parts and Accessories Sales by job positions (MSIC G453) ....76

Required workforce for Vehicle Parts and Accessories Sales by year 2025
(Micro-sized companies)...........................................................................77

Required workforce for Vehicle Parts and Accessories Sales by year 2025
(Small-sized companies) ..........................................................................77

Distribution of job positions for Sales and Services category (Micro-sized
companies) ...............................................................................................79

Distribution of job positions for Sales and Services category (Small-sized
companies) ...............................................................................................79

Distribution of job positions for Technician category (Micro-sized
companies) ...............................................................................................80

Distribution of job positions for Technician category (Small-sized
companies) ...............................................................................................80

Education background for Sales and Services category (Micro-sized
companies) ...............................................................................................81

ix

Figure 4-47: Education background for Sales and Services category (Small-sized
companies) ...............................................................................................82
Figure 4-48:
Figure 4-49: Education background for Technician category (Micro-sized companies) 83
Figure 4-50:
Figure 4-51: Education background for Technician category (Small-sized companies)83
Figure 4-52:
Salary for Sales and Services personnel by job positions (MSIC G454) ..84
Figure 4-53:
Salary for Technician by job positions (MSIC G454) ................................84
Figure 4-54:
Required workforce for Sales and Services category by year 2025 (Micro-
Figure 4-55: sized companies)......................................................................................86

Figure 4-56: Required workforce for Sales and Services category by year 2025 (Small-
Figure 4-57: sized companies)......................................................................................86
Figure 4-58:
Figure 4-59: Required workforce for Technician category by year 2025 (Micro-sized
Figure 4-60: companies) ...............................................................................................87
Figure 4-61:
Figure 4-62: Required workforce for Technician category by year 2025 (Small-sized
Figure 4-63: companies) ...............................................................................................88
Figure 4-64:
Figure 4-65: Background of the respondents and the sectors served (%) ....................91

Figure 4-66: Distribution of job positions for Vehicle Inspection category .....................95

Figure 4-67: Education Background for Vehicle Inspection Category...........................96

Figure 4-68: Salary for Vehicle Inspection Personnel by Job Positions ........................97

Figure 4-69: Required Workforce for Vehicle Inspection Workforce by Year 2025 .......97

Figure 4-70: VET Education and Training System in Germany (GOVET, 2020)...........98

TVET Education Pathway in Indonesia (Kadir et al., 2016) ....................102

Thailand Education System ....................................................................106

Summary of different TVET education approaches and policies ............114
MSIC G451 employers’ satisfaction on the workforce performance based on
education background ............................................................................116
MSIC G452 employers’ satisfaction on the workforce performance based on
education background ............................................................................117
MSIC G453 employers’ satisfaction on the workforce performance based on
education background ............................................................................117
MSIC G454 employers’ satisfaction on the workforce performance based on
education background ............................................................................118
MSIC C293 and MSIC E383 employers’ satisfaction on the workforce
performance based on education background........................................118
MSIC S960 employers’ satisfaction on the workforce performance based on
education background ............................................................................119

x

Figure 4-71: Number of Graduates from MOHR Accredited Centre (SLaPB) from 2017-
2019 (Jabatan Pembangunan Kemahiran, 2020) ..................................122
Figure 4-72:
Number of Graduates from MOHR Accredited Centre (SLDN) from 2017-
Figure 4-73: 2019 (Jabatan Pembangunan Kemahiran, 2020) ...................................124
Figure 4-74: Reasons of Not Implementing the SLDN Programmes by Respondents 125
Figure 4-75:
Figure 4-76: Number of graduates with certificates from MQA Accredited Institutions126
Figure 4-77:
Figure 4-78: Number of graduates with diploma from MQA Accredited Institutions ....127
Figure 4-79:
Number of graduates with degree from MQA Accredited Institutions .....128
Figure 4-80:
Figure 4-81: Current challenges in automotive aftermarket industry...........................130
Figure 4-82:
Figure 4-83: Training required by automotive aftermarket industry.............................131
Figure 4-84:
Summary of the yearly supply and demand gaps for MSIC G451, G452,
Figure 4-85: G453 and G454 up to the year 2025 ......................................................132

Demand and supply for MSIC G451.......................................................133

Demand and supply for MSIC G452.......................................................134

Demand and supply for MSIC G453.......................................................135

Demand and supply for MSIC G454.......................................................136

The pillars for TVET education action plan for Malaysia Automotive
Aftermarket .............................................................................................138
5 years TVET Action Plan for Malaysia Automotive Aftermarket ............157

xi

LIST OF TABLES

Table 1-1: Related Industry Associations for Automotive Aftermarket Sector (Malaysia
Automotive Robotics and IoT Institute, 2020) .............................................2
Table 1-2:
Number of Public and Private Institutions Accredited by JPK (SLaPB) per
Table 1-3: MSIC Section (Jabatan Pembangunan Kemahiran, 2020) .........................5

Table 3-1: Number of Public and Private Institutions Accredited by MQA per MSIC
Table 3-2: Section (Ministry of Higher Education, 2020)..............................................6
Table 3-3:
Table 3-4: Objective-to-Survey Question Mapping ....................................................26

Table 3-5: Summary of the Project Activities .............................................................28

Table 3-6: MSIC Codes for Aftermarket Sub-Sectors................................................29

Table 3-7: Number of Companies per MSIC Code (APEC, 2015(1); Department of
Statistics Malaysia, 2019(2); PUSPAKOM, 2020(3)) ...................................31
Table 3-8:
Table 3-9: Total Number of Workers, Motor Vehicles Sub-Sector Q2 2020 (Principal
Table 3-10: Statistics of Services Sector, Second Quarter 2020, DOSM) ...................32

Table 4-1: Required Number of Companies to Meet the Desired Confidence Interval
Table 4-2: .................................................................................................................34
Table 4-3:
Table 4-4: Job Positions in Automotive Aftermarket Sub-Sectors following four-digit
Table 4-5: MASCO Codes .........................................................................................39

Table 4-6: Sampling for Supply Analysis ...................................................................40

Table 4-7: List of NOSS Related to the Automotive Aftermarket Sector....................41

Table 4-8: List of MQA Accredited Programmes Related to the Automotive Aftermarket
Sector .......................................................................................................43

Number of companies involved in the survey ...........................................47

Survey Results on Remanufacturing Definition ........................................90

Malaysia Remanufacturing Company APEC (2015).................................92

Proposed Remanufacturing Strategy for Malaysia (MAARA, 2016) .........93

Competence Model for Skills Assessment in Occupational Field of Motor
Vehicle Technology (Becker, 2009)........................................................100
Teaching Factory Models in Indonesia’s Vocational Education System
(Ruslin, 2017) .........................................................................................103

Indonesia Automotive Aftermarket Student Work Experiences Programme
............................................................................................................... 104

Overview of Distribution Players in Thailand (Ipsos Business Consulting,
2016b) ....................................................................................................108

xii

Table 4-9: Comparison of TVET Dual Training System in Malaysia, Thailand,
Indonesia, and Germany ........................................................................111
Table 4-10:
Automotive Aftermarket NOSS with SLaPB and SLDN graduates produced
Table 4-11: from 2017 to 2019 (Jabatan Pembangunan Kemahiran, 2020) ..............120
Table 4-12:
Summary of yearly gap between supply and demand until 2025............137
Table 4-13:
Table 4-14: Recommendation for Improvement of TVET Education in Automotive
Table 4-15: Aftermarket Sector..................................................................................139

Recommended NOSS for revision..........................................................158

List of NOSS to be utilised......................................................................159

Summary of action plan development goal.............................................161

xiii

LIST OF ABBREVIATIONS

3S Sales, Service and Spare Parts

4S Sales, Service, Spare Parts and Body and Paint Services

AATF Automotive Authorised Treatment Facilities

AI Artificial Intelligence

APEC Asia-Pacific Economic Cooperation

AQRF ASEAN Qualifications Reference Framework

ASEAN Association of Southeast Asian Nations

CAGR Compound Annual Growth Rate

CBU Complete Built Unit

CI Confidence Interval

CSR Corporate Social Responsibility

CU Competency Unit

D4 Diploma 4

DEEP Dealers Entrepreneurship Enhancement Programme

DGHE Directorate General of Higher Education

DKM Malaysian Skills Diploma

DLKM Malaysian Advanced Skills Diploma

DNFE Department of Non-Formal Education

DOSM Department of Statistics Malaysia

DSD Department of Skills Development

EEV Energy Efficient Vehicle

ELV End-of-Life Vehicle

EV Electric Vehicle

FDI Foreign Direct Investment

FEMPTAM Federation of Engineering and Motor Parts Trader’s Association
Malaysia

FTA Free Trade Agreements

xiv

GDP Gross Domestic Product

HOTS High Order Thinking Skills

HQCP Honda Qualified Certified Personnel

IHL Institution of Higher Learning

IMI Institute of the Motor Industry

IMP3 Third Industrial Masterplan

IoT Internet of Things

IPTS Higher Educational Private Institutions

IR4.0 Industrial Revolution 4.0

ISCO International Standard Classification of Occupations

JPK Jabatan Pembangunan Kemahiran / Department of Skills Development

MAARA Malaysia Automotive Recyclers Association

MaaS Mobility as a Service

MAP Mazda Apprenticeship Programme

MARii Malaysia Automotive, Robotics and IoT Institute

MASCO Malaysia Standard Classification of Occupations

MCO Movement Control Order

MENC Ministry of Education and Culture

MOE Ministry of Education Malaysia

MOHE Ministry of Higher Education

MOHR Ministry of Human Resources

MOL Ministry of Labour

MOT Ministry of Transport

MQA Malaysia Qualifications Agency

MSIC Malaysia Standard Industrial Classification

MTUN Malaysian Technical University Network

NAP National Automotive Policy

NBAIoT National Blueprint for Automotive Internet of Things

NBAMaaS National Blueprint for Automotive Mobility as a Service

NBAR National Blueprint for Automotive Robotics

xv

NOSS National Occupational Skills Standards

NQF National Qualifications Framework

NRAA National Roadmap for Automotive Aftermarket

NRAMT National Roadmap for Automotive and Mobility Technology

NRAMTa National Roadmap for Automotive and Mobility Talent

NRAMVC National Roadmap for Automotive and Mobility Value Chain

NxGV Next Generation Vehicle

OF Occupational Framework

OEM Original Equipment Manufacturer

OJT On Job Training

OPEC Office of Private Education Commission

OVEC Office for Vocational Education Commission

PB Pusat Bertauliah / Accredited Centre

PIMA Perantisan Industri Menengah Atas

PPT Pengiktirafan Pencapaian Terdahulu

Prakerin Praktek Kerja Industri

R&D Research and Development

RHD Right-Hand Drive

SACP Sales Advisor Certification Programme

SKM Malaysian Skills Certificate

SLaPB Sistem Latihan Program Bertauliah

SLDN Sistem Latihan Dual Nasional / National Dual Training System

SMA Upper Secondary School

SME Small and Medium Enterprise

SMK Sekolah Menengah Kejuruan (Indonesia) / Vocational Senior Secondary
Schools

SPSS Statistical Package for the Social Sciences

STI Science Technology and Innovation Policy Office

SUVs Sport Utility Vehicles

TQF: VEd Thai Qualifications Framework for Vocational Education

xvi

T-TEP Toyota Technical Education Programme
TVET Technical and Vocational Education and Training
V2X Vehicle-to- Everything
VAT Value Added Tax
VET Vocational Education and Training
WTP Workshop Transformation Programme

xvii

LIST OF APPENDICES

Appendix A: Current Status of Automotive Aftermarket NOSS ............................................ 172
Appendix B: List of Malaysian Automotive Aftermarket Companies Involved in The Survey 178
Appendix C: Example of Questionnaire for Maintenance & Repair of Motor Vehicles (MSIC
G452) .............................................................................................................. 190

xviii

“Quality Technical and Vocational Education and
Training (TVET) help develop the individual’s
knowledge of science and technology in a broad
occupational area requiring technical and
professional competencies and specific
occupational skills. National TVET systems
therefore need to develop the knowledge and
skills that will help the workforce become more
flexible and responsive to the needs of local
labour markets, while competing in the global
economy”

- UNESCO and ILO (2002) -

xix

1

1 INTRODUCTION

In the early era of economic development, the automobile industry was considered the ‘industry of
industries.’ This term was used as at that time it seemed like the automotive industry had the potential
to drive the industrialisation forward due to its linkages and spill over effects on other manufacturing
industries (Baker & Field, 2007). The automotive industry, which originated in Europe in the late 19th
century, has now become one of the biggest contributors to Malaysia's economy since the first
national car production in 1985. The country's economy is currently driven by all sectors in this
industry, including vehicle manufacturing, components and parts production, vehicle exports, as well
as aftermarket components and services. Over the years from 1980, the Malaysian automotive
industry has evolved from car assembly towards manufacturing of passenger cars, while
concurrently generating the growth of employability and raising the average wages among the
workforces. The increase of the demand related to this industry has created many job opportunities,
mainly in the manufacturing and aftermarket services sectors (Wad & Chandran Govindaraju, 2011).

The automotive industrial ecosystem consists of six different sectors, including resource
sector, primary sector, intermediate sector, supportive sector, manufacturing sector, and aftermarket
sector. In 2019, the country's automotive industry contributed to the country's 4.3% Gross Domestic
Product (GDP) with over 600 automotive suppliers and vendors, 1000 aftermarket workshops and
dealers, and nearly 65,388 new workforces were created in the manufacturing and aftermarket
sector (Malaysia Automotive Robotics and IoT Institute, 2019). Referring to Malaysia Standard
Industrial Classification (MSIC), the aftermarket sector can be classified into seven sections which
are MSIC C293 (Manufacture of Parts and Accessories for Motor Vehicles), MSIC E383 (Dismantling
of Automobiles and Other Equipment for Material Recovery), MSIC G451 (Sale of Motor Vehicles),
MSIC G452 (Maintenance and Repair of Motor Vehicles), MSIC G453 (Sale of Motor Vehicle Parts
and Accessories), MSIC G454 (Sale, Maintenance, and Repair of Motorcycles and Related Parts
and Accessories), and MSIC S960 (Other Service Activities). This sector includes all activities related
to sale, repair and maintenance of motor vehicles and motorcycles, including the retail sale of parts
and accessories as well as activities related to vehicle inspections and remanufacturing and
dismantling of the parts. Table 1-1 shows a list of associations that are currently registered with
Malaysia Automotive, Robotics and IoT Institute (MARii), which are related to the automotive
aftermarket sector in Malaysia.

The continuous technological innovation and advancement have significantly changed the
automobile over the decades right from the fossil fuel engines to the electric power car and the
implementation of autonomous system features. Demand for skilled workforce in the automotive

2

industry is very high. However, the rapid development of automotive technology has been a major
challenge for training providers, as well as public and private education institutes in providing training
in line with the current technology development. In addition, the growing trend of vehicle technology
in the industry is not in line with the facilities and available equipment at the educational institutions.

Table 1-1: Related Industry Associations for Automotive Aftermarket Sector (Malaysia Automotive
Robotics and IoT Institute, 2020)

No Associations
1 Asia Pacific Natural Gas Vehicles Association (ANGVA)
2 Automotive Accessories Traders Association
3 Automotive Technicians of Malaysia Society (ATOMS)
4 Central Pahang Automobile Repairer Association (CPARA)
5 Commercial Vehicles Rebuilders Association Malaysia (CVRAM)
6 Federation of Automobile Workshop Owners Association of Malaysia (FAWOAM)
7 Federation of Engineering and Motor Parts Traders' Association Malaysia

(FEMPTAM)
8 Federation of Motor and Credit Companies Association of Malaysia (FMCCAM)
9 Kuching Bicycle & Motor Trader Association (KBMTA)
10 Malaysia Association of Tyre Retreaders & Dealer Societies (MATRADS)
11 Malaysia Automotive Recyclers Association (MAARA)
12 Malaysia Motorcycle and Scooter Dealers Association (MMSDA)
13 Malaysia Used Vehicle Auto Parts Traders Association (MUVATA)
14 Persatuan Insurans Am Malaysia (PIAM)
15 Persatuan Pengimport dan Peniaga Kenderaan Melayu Malaysia (PEKEMA)
16 Persatuan Pengusaha Industri Bengkel Malaysia (PPIBM)
17 Sarawak Tyre Dealer & Retreading Association (STRADA)
18 Selangor & Kuala Lumpur Lorry Operators Association
19 Selangor and Federal Territory Engineering and Motor Parts Traders Association

(EMPTA)

Feedback from the industries on the shortage of competent workforce in the aftermarket
sectors has triggered the need to conduct this study. Lack of data in aftermarket sectors has also
made this research significant to the industry. Findings showed that majority of published data and
reports related to the automotive industry focussed more on automotive manufacturing rather than
the aftermarket sectors. The principal statistics of motor vehicles sub-sector by group and industry
stated that the total number of established associations for Malaysian automotive aftermarket is
62,387 (Department of Statistics Malaysia, 2019). This huge number showed that the aftermarket
industry as a whole plays a major role in running the automotive industry. However, published reports
and data focussing on the sub-sector are yet hard to find. Referring to Malaysia Standard
Classification of Occupations (MASCO), there are no job positions or MASCO Codes assigned,

3

specifically for MSIC G453, MSIC C293, and MSIC E383 (Ministry of Human Resources, 2020a).

This study covers more than 600 Technical and Vocational Education and Training (TVET)
training centres, which offer the aftermarket courses in the automotive field in Malaysia, are the
important key elements of this study. However, these existing courses need to be reviewed in line
with the current industry needs. This study, which focussed on the supply and demand of TVET
workforce in automotive industry aftermarket in Malaysia, will be a guide to implement the National
Automotive Policy (NAP) 2020 under the National Roadmap for Automotive and Mobility Talent
(NRAMTa) and National Roadmap for Automotive Aftermarket (NRAA).

Overall, this study will help the agencies related to the automotive aftermarket sector to:

i. Evaluate existing academic/TVET programmes that are relevant to the current industry
needs.

ii. Identify the new required training programmes related to the automotive industry that meet
current industry needs.

iii. Study the effectiveness of existing policies related to workforce in the automotive industry.

iv. Present a detailed statistic on the automotive industry workforce in Malaysia.

v. Identify the execution preform methods and effective ways in developing skilled workforce
compatible to industry needs.

vi. Standardise the demand and supply workforce expert in the automotive aftermarket sector
in terms of current technology adaptation skills and operational methods.

1.1 Problem Statement

Based on the data provided by the Department of Skills Development (JPK) on the available National
Occupational Skills Standards (NOSS) (Jabatan Pembangunan Kemahiran, 2020), most TVET
institutions offer automotive aftermarket courses related to repair and maintenance services. Out of
84 automotive aftermarket NOSS, 73% are related to the MSIC G452 which belong to the
Maintenance and Repair of Motor Vehicles section. These data are also supported by the details of
available NOSS as described in Table 3-9 of this report. Only 9% of the total NOSS belong to MSIC
G451 (Sale of Motor Vehicles), 12% belong to MSIC G454 (Sale, Maintenance, and Repair of
Motorcycles and Related Parts and Accessories), 4% belong to MSIC S960 (Other Service

4

Activities), 1% focuses on MSIC E383 (Dismantling of Automobiles and Other Equipment for Material
Recover), and the rest of 1% are specified to MSIC C293 (Manufacture of Parts and Accessories for
Motor Vehicles). The overall percentage breakdown is as illustrated in Figure 1-1. The programme
breakdown exhibits that the previous developed NOSS focused more on the aftermarket courses
related to repair and maintenance services. Less attention was given to the other MSIC sections. In
fact, there was no NOSS available for MSIC G453. Based on the Ministry of Higher Education
(MOHE) tracers’ study, the programme accredited by MOHE is also more focussed on MSIC G452
(Ministry of Higher Education, 2020). This information is further elaborated in this report. Due to
limited data and research related to aftermarket industry, additional study should be conducted to
determine the importance of developing additional NOSS related to MSIC G453. Due to this reason
too, the current scenario of the aftermarket industry relies only on the available census. Hence,
additional research is required to provide deeper understanding of the related MSIC sections. In
addition, the breakdown number of public and private institutions accredited by JPK for Sistem
Latihan Program Bertauliah (SLaPB) of each automotive aftermarket MSIC section is listed in Table
1-2. Most of the institutions that run the NOSS programmes are from public institutions that focused
on MSIC G452 and MSIC G454 only.

As described in NAP 2020, the recent trend has shown that the current vehicles are equipped
with more sophisticated technologies, including Energy Efficient Vehicle (EEV), driverless vehicles,
Internet of Things (IoT), and Artificial Intelligence (AI) (Ministry of International Trade and Industry,
2020a). Advanced technology development has become the major interest of automobile
manufacturing industries worldwide. The rapid development of automotive technology has been a
challenge in gaining skilled workforce in line with today's technology. Many publications have
described the challenges of automotive manufacturing (Ngu et al., 2020), however, no detailed
information on the challenges of aftermarket industry to cope with the current requirements could be
found.

5

Figure 1-1: Breakdown of JPK NOSS and MQA Programmes by MSIC Sections

Table 1-2: Number of Public and Private Institutions Accredited by JPK (SLaPB) per MSIC Section
(Jabatan Pembangunan Kemahiran, 2020)

No MSIC Public Private
Section

1 G451 0 0

2 G452 369 238

3 G453 0 0

4 G454 46 36

5 E383 0 0

6 C293 0 0

7 S960 0 0

6

Table 1-3: Number of Public and Private Institutions Accredited by MQA per MSIC Section (Ministry of
Higher Education, 2020)

No MSIC Public Private
Section

1 G451 0 0

2 G452 17 3

3 G453 0 0

4 G454 1 0

5 E383 0 0

6 C293 0 0

7 S960 0 0

8 GENERAL 12 14

1.2 Objectives

The objectives of the study are as follows:

i. To evaluate the existing TVET programmes related to the Automotive Aftermarket Industry
offered by various TVET institutions for the year 2017 to 2019

ii. To identify the industry demand for TVET workforce in terms of:
a) Technical competencies and adaptation of advanced technologies in the industry
b) New skills required in line with industry needs

iii. To analyse the supply and demand of the Automotive Aftermarket workforce including:
a) Job positions and level of skills required as well as the salary rate
b) New job opportunities in the related industry

iv. To provide the projected supply and demand of the skilled workforce for the next five years
covering the Industry 4.0 skills from the year 2021 to 2025

v. To identify the best governance practices related to the collaboration between the
government and industry through benchmarking with the international countries

vi. To come out with action plans and recommendations to enhance the current TVET
programmes to reduce the gap between supply and workforce demand

vii. To provide recommendations to improve the implementation of the existing National Dual
Training System (SLDN) programmes in the Automotive field and increase participants from
the industry to collaborate with the certified training centres in Malaysia

7

1.3 Research Scope and Limitations

The scope and limitations of this study are as follows:

i. Automotive Aftermarket Industry and Institution
Research covers aftermarket sector, which has a large demand of skilled workforce.

ii. Geographical Area
The study covers the whole regions in Malaysia.

iii. Demand Analysis
The study covers the population and respondents from companies in the automotive industry.
Conflicts exist between industrial practitioners on the definitions of MSIC C293 (Re-
Manufacturing) and MSIC E383 (ELV Parts and Components Salvage). Non-existent
standards for this section have caused difficulty to define appropriate population. Thus, the
statistical study is not suitable for these areas.

iv. Supply Analysis
The study covers the population and respondents from TVET institutions accredited by
government agencies and non-government agencies.

v. Benchmarking
The benchmarking is conducted with Germany, Indonesia and Thailand. Germany was
selected because it is known as the world’s largest automotive manufacturer and they have
succeeded in making TVET a top choice in the education and career sectors. As for Indonesia
and Thailand, the countries were selected to evaluate our national achievement in
comparison to other ASEAN countries in terms of TVET education as well as automotive
aftermarket industrial development. The international engagements have been done through
virtual focus group discussions due to restrictions of travelling abroad during the COVID-19
outbreak.

8

9

2 LITERATURE REVIEW

2.1 Global Overview of the Automotive Industry

The automotive industry has evolved significantly over the past decade. For the last century, the
automotive industry has spread over the entire globe and influenced not only the global economy,
but also impacted how billions of people live. In Europe, the automotive industry has created about
12 million jobs. In the United States and Japan, the industry has accounted for more than 8 million
and 5 million jobs, respectively. The global automotive industry is about to enter a period of wide-
ranging and transformative change as sales continue to shift and environmental regulations become
more stringent.

The performance of the global automotive sector is monitored

on the surface based on the production and sales of the vehicles. The

global production statistics revealed an increase from 87.6 million

units in 2014 to 95.2 million units in 2018. Vehicles sold in the world

markets had recorded positive growth with an increase of 7.7 percent

sales volume of 85.3 million units in 2014 to 91.9 million units in 2018.

These figures showed that green vehicle sales accounted for 2

percent of the global vehicle sales in 2014 and 4 percent in 2018,

respectively. The year 2018 marked a record year for the sale of

battery-powered electric vehicles (EVs) in the global industry where

the sale of passenger electric cars boosted up to 74 percent, which

recorded 1.26 million sales throughout the year. It was one Figure 2-1: Global Overview of
of the highest increments among all car categories in the Vehicle Sales (Ministry of
global markets followed by the sales of hybrid and plug-in
hybrid vehicles. International Trade and Industry,
2020a)

A lot of factors have contributed to the recorded sales. The positive environmental impacts
promoted by the Chinese government have increased the demand for EVs throughout the year 2018
as the segment gained more visibility among consumers. Tesla’s Model 3 became the world’s best-
selling EV, boosted by sales in North America where it first became available. The diesel crisis in
Europe in 2018 also helped to raise awareness among consumers about the benefits of driving
electric cars. Until now the Sport Utility Vehicles (SUVs) are very popular and still in demand. The
trend continues to appeal the consumers around the globe. Toyota, Hyundai-Kia, Volkswagen

10
Group, and Renault-Nissan have recorded almost 12% of the global automotive market share.

China has the largest automobile market in the world with 19 million vehicles sold in 2012.
Today, in China, the aftermarket sales have become more significant. The new car sales growth is
slowing from 18% a year between 2006 and 2012 to a projected 6% a year between 2012 and 2020.
That is still a lot of cars, however, the opportunity is on the aftermarket sales, including spare parts,
services, used car sales, and financing, which serves as an integral component of brand building
and sales funnel management. Revenues of aftermarket automotive parts on their own could grow
roughly around 20 billion euro in 2012 by 20% a year and reach nearly 100 euro billion by 2020. A
strong aftermarket network could also enable Original Equipment Manufacturers (OEMs) to build
brand loyalty. To capture this opportunity, OEMs need to enhance their dealer capabilities as today
the dealership is mainly focused on new car sales.

2.2 Automotive Industry in Malaysia

Figure 2-2: Automotive Industry Snapshot 2019 (Malaysia Automotive Robotics and IoT Institute, 2019)

Since the establishment of Proton in 1983, Malaysia has succeeded in developing integrated
capabilities in the automotive industry which include local design and styling capability, full-scale

11

manufacturing operations, and extensive local participation in the supply of components. Malaysia
is committed to stimulate the expansion of the automotive industry through supportive regulatory of
national automation, talent development, and automotive education and training. The research and
development facilities and activities related to the technology development of the automotive industry
such as the establishment of the Centre of Excellence are also supported by the Malaysian
Government with the project value of more than RM18.07 billion.

The automotive industry is one of the main contributors to the growth of the Malaysian
economy. The country’s economy is generated from the manufacturing activities of automotive
vehicles, components and parts, the export of vehicles and components, as well as the aftermarket
services such as vehicle maintenance and repair services. Since the establishment of Proton, i.e.,
the first national car, the local automotive industry now has more than 20 manufacturing and
assembly plants in the country producing passenger and commercial vehicles, as well as
motorcycles and scooters. In 2019, the country's automotive industry contributed to the country's
4.3% GDP with a total export of Complete Built Unit (CBU) cars, parts and components, and
remanufacturing of parts worth RM15.45 billion, with 423 automotive suppliers and vendors, and a
total of 65,388 jobs were created, as illustrated in Figure 2-2.

The automotive industry plays a significant role in transforming Malaysia into an industrialised
nation, which translates into high-value economic activities, improving standards of living, as well as
creating high-paying jobs. The sector creates important impacts on the development of upstream
industries, such as steel and chemicals, as well as downstream industries, including information
technology and maintenance services.

2.2.1 National Automotive Policy (NAP)

Much of the country’s success in developing the domestic automotive industry has been facilitated
by policies that promote local vehicle manufacturers. Moving forward, global and domestic
challenges put the sustainability of this industry at risk. Recognising this global environment, the
NAP seeks to address various issues and challenges faced by the OEM and suppliers and transform
the local automotive sector to become a more feasible and significant contributor to the Malaysian
economy (Ministry of International Trade and Industry, 2020a).

The NAP aims to facilitate the transformation and optimal integration of the national industry
into regional and global industry networks to generate sustainable value creation. The NAP targets
to provide a clear and transparent direction for all industries related to the automotive industry to

12
enable them to make optimal plans and investment decisions for the future. The NAP was first
introduced in 2006 under the Third Industrial Masterplan (IMP3) 2006-2020 to transform the
automotive industry as one of the significant contributors to the Malaysia economy. It outlined the
key directions and strategies in preparing the local automotive players towards a more competitive
and sustainable automotive industry. Then, the second version of the policy was introduced in 2009,
focusing on enhancing the capabilities of the domestic automotive industry and creating a more
conducive environment for investments. Later, in 2014, a third version called NAP 2014 was
introduced. It emphasised on green initiatives, market expansion, as well as enhancement of the
entire automotive ecosystem through the development of technology, human capital, and supply
chain. The key objective of the NAP 2014 was to transform the Malaysian automotive industry
towards becoming the ASEAN hub for EEV through the development of research and development
capabilities for right-hand drive (RHD) vehicles and related technologies, such as fuel efficiency, light
material, telematics, tooling, and component design. The ultimate objective of the NAP 2014 was to
establish Malaysia as a regional EEV hub by the year 2020.

Figure 2-3: National Automotive Policy (NAP) 2006–2020 (Ministry of International Trade and Industry,
2020a)

The fourth version named NAP 2020 was introduced in 2020. It envisions to enhance
Malaysia’s automotive industry in the era of digital industrial transformation from 2020 to 2030, thus
enabling Malaysia to realise Connected Mobility.

13
The NAP 2020 is the outcome of collective views and inputs from both government and
industry stakeholders. The NAP 2020 is a holistic policy that covers the comprehensive development
of value chain, human capital, indigenous technologies, aftermarket, exports, infrastructure,
standards or regulations, and others. The National Automotive Vision becomes the cornerstone for
the NAP 2020 to ensure long-term coherence for industry stakeholders in addressing challenges of
the automotive sector. NAP 2020 encourages new growth areas through the integration of
technologies such as Next Generation Vehicle (NxGV), Mobility as a Service (MaaS), and Industrial
Revolution 4.0 (IR4.0) which are in line with the development of future technologies to ensure that
the local automotive industry continues to grow and remain competitive.
The overall objective of the NAP is to generate sustainable economic value creation. This will
maximise the long-term contribution of the automotive sector to the national economy and at the
same time ultimately benefit the Malaysian consumers. The need to create economic value entails
that the industry will continue to require supportive Government policies in order to become fully
competitive internationally.

2.2.2 Malaysia Automotive Roadmap

Figure 2-4: The Automotive Industrial Ecosystem

14

The Automotive Industrial Ecosystem has been developed to complement the execution of the NAP
2020. As demonstrated in Figure 2-4, the automotive ecosystem has been segmented into six
sectors, including the resource sector, primary sector, intermediate sector, manufacturing sector,
supportive sector, and aftermarket sector. Each sector performs an essential linkage in ensuring the
high cost and efficient manufacturing of car products and services throughout the complete
automotive delivery chain and into the export market.

To ensure the success of the ecosystem, significant plans have been developed. In NAP
2020, four roadmaps and three blueprints have been established and will be implemented in ten
years’ time, i.e., from the year 2020 until 2030. These roadmaps are to serve as guidelines to achieve
the transformation objective of the local automotive industry. These documents are the improvement
of the current six roadmaps developed in NAP 2014. The NAP 2020 Roadmaps are outlined as
follows:

i. National Roadmap for Automotive and Mobility Value Chain (NRAMVC)

The NRAMVC aims at developing and improving the competitiveness of component suppliers
of automotive and mobility value chain to be able to supply either domestically and/or in global
markets. This roadmap will help to improve the components and parts supply in Malaysia
with the integration of informative technology and smart manufacturing as a way to allow
flexibility in the manufacturing process. The outline of the NRAMVC includes the
enhancement activities in operation, quality and business management, as well as the
improvement of parts manufacturing by implementing the IR4.0 elements in product
manufacturing and testing applications.

ii. National Roadmap for Automotive and Mobility Technology (NRAMT)

NRAMT maps the way forward on related technology development with the implementation
of IR4.0 elements to support the development and manufacturing of automotive parts and
products, including the mobility ecosystem in the aspect of EEV, NxGV, smart mobility, and
IoT infrastructure.

iii. National Roadmap for Automotive and Mobility Talent (NRAMTa)

The NRAMTa forms the improved plans for the development of a competitive workforce that
will fulfil the industry demand at all levels incorporating the manufacturing, marketing, and
automotive services. This roadmap also integrates the mobility ecosystem. In addition to this,
the NRAMTa concentrates on enhancing the quality of existing programmes for technicians

15

and operators at local training institutions. Improvements in syllabus for product automation
and manufacturing of hybrid components manufacturing, electric, engine, and transmission
will ensure the availability of skilled workforce in areas related to IR4.0. NRAMTa also
includes plans to develop specific skills in identified fields and upgrade skills from basic to
advance in the field of engineering by implementing the IR4.0 elements and analysis skills,
such as Big Data Analytics, simulation, visualisation, System Integrator, AI, and machine
learning.

iv. National Roadmap for Automotive Aftermarket (NRAA)

The NRAA includes the detailed criteria for the aftermarket sector through the enhancement
of remanufacturing, standards, and best practices that can be implemented by local
automotive stakeholders to make Malaysia an automotive remanufacturing hub in ASEAN.
NRAA also provides the guidelines of remanufacturing and Automotive Authorised Treatment
Facilities (AATF). This roadmap also outlines the guidelines for optimising the quality of
recycling and reusing of components by emphasising on the digital usage, such as Big Data
Analytics. This could escalate the revenue and enhance the effectiveness and efficiency of
aftermarket operations through customer and vehicle data analysis, maintenance, and
optimisation of logistics planning.

v. National Blueprint for Automotive Mobility as a Service (NBAMaaS)

The NBAMaaS aims at planning mobility solutions and transport services. This blueprint is
designed to accommodate the increasing needs of the automotive industry in Malaysia.

vi. National Blueprint for Automotive Robotics (NBAR)

The NBAR outlines the planning and strategies to provide solutions to problems, issues, and
challenges in robotic technology, specifically in the manufacturing sector. Through the
introduction of IR4.0, Malaysia will drive towards the capability advancement in product
designing, manufacturing, operations, equipment handling, supply chain management, and
factory green energy management by using Robotics Automation technology.

vii. National Blueprint for Automotive Internet of Things (NBAIoT)

The NBAIoT maps the direction of the connectivity revolution in the automotive industry. This
blueprint also includes marketing strategies of connected vehicles, including Vehicle-to-
Everything (V2X), autonomous vehicles, as well as safety aspect and regulations. NBAIoT

16
also outlines ways to address manufacturing challenges, vehicle life cycle, and process
development of a conducive IoT ecosystem.

Figure 2-5: NAP 2020 Roadmaps and Blueprints (Ministry of International Trade and Industry, 2020b)

As depicted in Figure 2-5, the roadmaps and blueprints will enhance the role of related
industries and institutions in pushing the technological innovation forward and become the main
reference and guideline to implement the strategies in realising NAP 2020 vision. As highlighted in
Figure 2-5 as well, there are two roadmaps outlined in the NAP 2020 which are related to the
automotive aftermarket industry. Specifically, national roadmap number three focuses on the supply
while national roadmap number four focuses on the demand of the automotive aftermarket industry.

2.2.3 Malaysia Automotive Aftermarket

Malaysia automotive industry now has more than 20 factories for manufacturing and installations of
cars, commercial vehicles, and motorcycles. The automotive industry has contributed to the country's
4.3% GDP and more than 300,000 workforces in the manufacturing and aftermarket sector.

In Malaysia, aftermarket operations contain all activities related to maintaining a car after its
initial sale and until the end of its lifecycle; which encompasses all parts and services purchased for
vehicles after the original sale, including replacement parts, accessories, lubricants, appearance
products and service repairs, as well as additional innovative services that help to optimise the use

17
of the vehicle (Figure 2-6). Approximately 1,700 companies are registered with MARii under the
Malaysia Automotive Aftermarket segment whereas more than 62,000 companies have been
identified as automotive aftermarket companies in the 2018 census (Department of Statistics
Malaysia, 2019).

Figure 2-6: The Aftermarket Ecosystem

As presented in Figure 2-7, from the year 2014 until 2019, a total of 312,565 jobs were
created in the manufacturing and aftermarket sectors. In the year 2019 alone, over 600 automotive
suppliers and vendors, 1000 aftermarket workshops and dealers, and nearly 65,388 new workforces
were created in the manufacturing and aftermarket sector. It is forecasted the industry will contribute
10% to the country’s GDP in 2020 where vehicle production is expected to increase to 1.35 million
units. In terms of employment, the automotive industry is expected to create an additional 150,000
employment opportunities by 2020.

As for the automotive aftermarket sector, the current global automotive aftermarket business
is valued at about USD 944.0 billion. It is expected to grow 3% annually and resulted in the current
automotive business value of around USD 1.42 trillion by 2030. According to a 2019 Global Market
Insights, Inc. report, the Asia Pacific automotive aftermarket is expected to grow from over USD 115
billion in 2017 to USD 165 billion by 2024 (Hedge, 2019). Among the Asia Pacific countries,
automotive aftermarket of Indonesia, Thailand, and Malaysia have seen compound annual growth

18
rate (CAGR) of almost 12.9% until 2018 since the year 2010 (Edge, 2014).

To ensure a sustainable Malaysian automotive industry, the Government has taken various
steps to ensure that the industry is competitive domestically and globally. The strategic direction and
focus areas of Malaysian automotive aftermarket sector has been outlined in the NRAA, where this
roadmap is also to align the Malaysian automotive aftermarket industry with the NAP 2020.

Figure 2-7: Total Job Creation for Manufacturing and Aftermarket 2014-2019 (Malaysia Automotive
Robotics and IoT Institute, 2019)

The focus aftermarket ecosystem in the NRAA includes the area of end-of-life vehicles, as
well as passenger and commercial vehicles, where it aims to improve the relevant policies,
standards, and guidelines. This roadmap supports the strategic thrusts of NAP 2020 for the
automotive aftermarket sector, which are safety, consumerism, and environment. However, as the
world has seen rapid development of new automotive technology and shifting toward IR4.0, it is
important for Malaysia and the aftermarket players to be strategic in adopting new technologies,
especially the NxGV, into the aftermarket as outlined in the NAP 2020.

In 2020, technology and digital era have led the market and customers to expect any services
available online. This trend also happens in the automotive aftermarket from online bookings of

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appointments to vehicle pickups and payments. Customers are expecting automotive service
providers to offer fast information online so that they can make quick assessment on cost and quality
of the workshop services and parts.

NRAA has highlighted that shifts in competitive power, emergence of NxGV, as well as new
customer expectations will fundamentally change the automotive industry. These changes will result
in three major effects, which are the disruption along the value chain, change in end-customer
access, and a shift in profit pools. Among the changes include the e-commerce and digital platform
players replacing the conventional distributors and workshop businesses, as well as new specialised
aftermarket players, such as EV and fleet maintenance operators to spread. Moreover, as the
information is accessible online, higher price of transparency is expected from the customers across
the entire value chain. Besides, the customers will be highly dependent on the automated
recommendations and system. It is reported that in the next few years, more than EUR 100 billion
or 30% to 40% of the aftermarket profits will be drawn from the EV, connected cars, and e-commerce
activities.

The aftermarket of the automotive industry has shown a spark increment throughout the
lifecycle of each product and service. This aftermarket ecosystem proves the opportunities in the
demand of the automotive workforce along the process. As challenges come with the advancement
in technology and skills, the supply of workforce is needed to be groomed and established so that it
can commit to consumers’ requirements.

2.3 COVID-19 Outbreak Influences

Since its emergence in late 2019, COVID-19 pandemic has brought a serious global health
crisis and caused negative economic consequences to most of the industrial sectors globally. The
impact of this outbreak has caused a number of uncertainties in the economic situation that highlights
the requirement of additional pre-assessments to develop guidelines and policies.

In most parts of the world, especially Europe, Japan, and South Korea, the major markets
are suffering economic trauma due to the COVID-19 pandemic, and the industry has yet to
restructure. This situation has caused reduced replacement parts of existing vehicles due to the
MCO or lockdown event, which unfortunately has forced the industries to stop vehicle production.
Figure 2-8 shows an example of the COVID-19 pandemic impact to the automotive industry. Most of

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the big players (either part suppliers or automobile manufacturers), mainly from Europe and North
America, faced a decline in footfalls o dealerships. The parts were also expected to be weaker in
their local market demand as the customers cancelled their vehicle purchase decisions as the
governments enforced the MCO. As a consequence, this also contributed some effects to Malaysia's
aftermarket segment, especially imported parts and components for vehicle maintenance.

Figure 2-8: Effects of COVID-19 Outbreak on Automotive Manufacturing and Supply Chains (Markit,
2020)

The situation could pose an opportunity in the aftermarket to generate a substantial demand
for replacement parts and consumables as older vehicles continue to be on the road. Consumables
and wear-and-tear parts are expected to be the key beneficiaries among all aftermarket parts and
components. In addition, the situation could also generate opportunities for repair and maintenance
parts and components, as well as remanufacturing activity. The automotive manufacturers are
expecting to face a huge declination in sales due to the economic situation which causes a decline
in salary and employment opportunities. This will consequently reduce the aftermarket market size,
thus limits the industrial growth and emergence of new Bumiputera companies.

Due to these matters, the analyses of the aftermarket industry to be carried out in this research
includes assessing the challenges faced by the industries related to the difficulties in supply chain
management as well as changes in operation cost and reflecting the findings of this research with
the available policies and guidelines.

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i.

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3 METHODOLOGY

3.1 Research Flowchart

Preparation Phase Start
Determination of Project Objectives

Questionnaire Development

Phase 1 Questionnaire Validation Collection of Accessible
Online Data
Industrial Visits
and Consultations Meetings and
Consultations with
Qualitative Data Quantitative Data Related Technical
Gathering through Gathering Institutes, Government

Consultations through Surveys Institutions, and
Agencies
Phase 2
Supply Analysis:
Demand Analysis: Analysis on Number of Graduates
Comparative Study with Available Demand
Produced in 2017-2019
Statistical Data

Phase 3 Gap Analysis
Phase 4
Closing Phase Formulation of Final
Report

Presentation and
Report Submission

End

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The study was conducted in several phases, starting with the Preparation Phase, Phase 1–4, and
ending with the Closing Phase. In the preparation phase, an extensive study on the overview of the
current situation related to the automotive aftermarket sector was conducted prior to the
development of the project objectives. The aim of the study was to gauge the current development
of the local automotive industry and its aftermarket sector. The study was conducted with reference
to the automotive reports, statistical data, as well as national policies such as NAP 2020. From the
overview of aftermarket sector and problem statement stated in Chapter 1, the following research
questions were defined and then brought into the construction of the project objectives:

1. What is the need of the current Malaysia automotive aftermarket sector?
2. What are Malaysian automotive industry and aftermarket services capabilities?
3. What are the gaps between the industry demand and workforce supply from educational and

TVET institutions?
4. How will the automotive industry and its aftermarket sector growth be in the next 5 years?

Furthermore, in order to meet the objectives, the following data were required.

(a) Primary data

These were data collected from group discussions focusing on industry panel experts, as well
as potential committee and companies. The primary data were divided into two types:

i. Quantitative data

These data were mainly in numeric form. These include the number of workers by position,
turnover rate, and salary range. The data were analysed by MARii using an analysing tredata
method and a statistical method. They were then interpreted into infographics for the panels
and committee of the automotive industry for further validation and analysis.

ii. Qualitative data

The data were obtained through discussion sessions between consultants and the industry.
These include the preferable education background for every position, training requirement,
challenges and recommendations. Consultants were expected to conduct a discussion
session/training/consultation or any methods to obtain data from the respondents. Consultants
were also expected to provide initiatives and collaborate knowledge and experience from the
respondents.

Discussions were conducted through open communication (i.e., open-ended) and focus group
interviews, aggregate training, or meetings among the panels and committee of automotive

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industry while ensuring the information given by the respondents was classified in this
research.

(b) Secondary Data

Secondary data were the data obtained from published or available studies. For example,
reports released by government ministries, agencies, industry players, and academic
institutions.

The questionnaire was developed by considering the constructed project objectives and the
two types of questionnaires created to cater the quantitative and qualitative data. Quantitative
questionnaire is used to gain detailed insights from respondents about exact number of several
parameter of interest, while the qualitative questionnaire is used to explore and describe the reason
of the quantitative findings. In addition, the automotive occupational framework (OF) was considered
as the reference to develop questions related to salary and number of workers by job positions. As
the survey questions were related to the characteristic profiling, the validation process and the
reliability test were less complicated compared to the questionnaire related to the independent
variable and dependant variable of related questions. Instead of using statistical validity and
reliability tests, the questionnaire was validated by industry experts. This ensured that the questions
given were able to provide accurate information which represents the industry related to the specific
MSIC section. As the job positions for each MSIC section are unique, validation from industry panels
or professional expert who have a vast experience in this industry is crucial. They are parts of the
main industry players in Malaysia’s aftermarket automotive industry. Table 3-1 shows the mapping
of the defined objectives to the survey questions. The samples of the questionnaire (example for
MSIC G452) are shown in Appendix 1 for quantitative survey and Appendix 2 for qualitative survey.

Qualitative research is usually conducted to focus on the important or significant findings from
quantitative research. This is to prevent irrelevant qualitative data from being included in the research
conclusion. In this study, the qualitative analysis was performed through interview of the industrial
representative by the researcher for all selected samples. The interview question will be guided by
the qualitative questionnaire to ensure the question direction is align with the research objectives.
This is to optimise the process of obtaining the data. The qualitative study was conducted
simultaneously with the quantitative study where both methods required a visit to the industry. The
qualitative findings were then analysed in accordance with the quantitative data obtained from the
survey result. Although the qualitative survey were conducted on all visited companies, only data
from selected companies were analysed. Only relevant data from the selected companies were
included in the final report. This was a purposive approach as the relevancy depended on the
quantitative results gained.

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In order to obtain a universal understanding, the data finding under specific MSIC Category
involved will also be classified into MASCO. The results of the characteristic profiling data were again
validated by numbers of professional who are the industrial expert and appointed as industry panel
specifically for this research. The findings were also compared with the available statistical data
produced by other agencies related to this area.

Table 3-1: Objective-to-Survey Question Mapping

Objectives References
Objective 1:
To evaluate the existing TVET programmes related to • Quantitative Survey
Objective 2: the Automotive Aftermarket Industry offered by various
Objective 3: TVET institutions for the year 2017 to 2019 Part A: Q3, Q4

Objective 4: To identify the industry demand for TVET workforce in • Quantitative Survey
Objective 5: terms of:
(a) Technical competencies and adaptation of Part B: Q1, Q2, Q3

advanced technologies in the industry • Academic/TVET

Institutions Supply

Statistical Data

• Qualitative Survey

Q1

• Qualitative Survey

Q2

(b) New skills required in line with industry needs

To analyse the supply and demand of the Automotive • Quantitative Survey
Aftermarket workforce including: Part C
(a) Job positions and level of skills required as well as • Qualitative Survey
Q2
the salary rate

(b) New job opportunities in the related industry

To provide the projected supply and demand of the • Quantitative Survey
skilled workforce for the next 5 years covering the
Industry 4.0 skills from the year 2021 to 2025. • Part A: Q4, Q5

To identify the best governance practices related to the • Academic/TVET
collaboration between the government and industry
through benchmarking with the international countries Institutions Supply

Statistical Analysis

• Qualitative Survey

Benchmarking Report

Objective 6: To come out with action plans and recommendations to Analysis Result and
enhance current TVET programmes to reduce the gap Survey Feedback

between supply and workforce demand