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(1) Pursat and Kampong Chhnang are transforming into provinces with the potential to expand themselves in the industrial sector
The other day, I met with Uncle Norm Tong. We made a promise regarding two locations—one for today. He is arranging the assembly of two types of vehicles: one is GAC, which is today, and the other is Chevrolet. Two superpowers are his partners. Congratulations on today’s inauguration. We also plan to visit another one at the end of the year.
What is also worth congratulating is specifically for the people of Kampong Chhnang province—a province that people used to just drive right past with nothing there. That expression was heard 10 to 20 years ago. Most people used to just drive past Kampong Chhnang and Pursat provinces and end up stuck in Battambang, or go further to the border. However, these two provinces—Pursat province and especially Kampong Chhnang province—have become provinces that have changed from being places people just drive past into provinces with great potential that are expanding within the industrial sector.
This is also a congratulations to His Excellency Sun Sovannarith (the provincial governor) for his hard work. I have seen his active involvement and dedication to transformation. In some places, he has creative ideas to shift the economic type from relying on agriculture to a place that creates industrial and manufacturing activities—a place to attract people and create added products for the people, especially those in Kampong Chhnang. It is the profile of a province that will become an important base for producing industrial products in the future.
(2) Aside from connecting the east and west of the Tonle Sap lake by a bridge and National Road 50C, a multipurpose port and a logistics center are in consideration
The National Road 5 has now been expanded. When I was young, riding from Phnom Penh to Kampong Chhnang was a bit difficult, and reaching Prek Kdam was also difficult. It took quite a while. Now, you blink and you’ve already missed it; you’ve arrived in Kampong Chhnang. Without such connecting potential, people would just speed by and bypass Kampong Chhnang even more.
However, the important thing I see is the change. Moving forward, potential is being further increased—especially now that we are arranging a connection from Kampong Chhnang province (over to Kampong Thom) or connecting between the east and west of the Tonle Sap lake. This plan has existed for a long time, but we have not yet fully implemented it: from Kampong Leng district/Kampong Chhnang to Stung Sen district/Kampong Thom via National Road 50C, where we have to build a bridge. At that location, we will also consider a multipurpose port and a logistics center. That is what His Excellency Sun Chanthol has negotiated, which could happen in the near future. In the past, we have gradually worked on this Road 50C, but once the crossing bridge is built, the road will also be arranged.
It is tough that the ferry will have to move again. The ferry company—it’s like the ferry operators who have been moving people ever since Neak Loeung up to here. Soon, once they build the bridge, where will they move to? The life of a ferry operator is no different from the life of a ferryboat rower; once a bridge connects, the passengers stop coming. That’s not a problem. What’s important is the connectivity that creates the province’s potential. If industries come, people come. Once people come, they start expanding potential for the service sector, various tourism sectors, and more within the province.
Regarding this investment company, according to the report, the planned production capacity can reach up to 20,000 units, capable of assembling 90% for the domestic market and exporting 10%. This is the company’s vision. Over this past period, we have assembled over 200 units, and we have set up CKD (Completely Knocked Down) production.
(3) Having a factory with capacity, having skilled human resources, expanding production and assembly capacity
In the future, we hope to be able to produce some components and spare parts locally as well. Shortly, it will go beyond that. I thank the investment for creating this skilled labor force. Working in a car assembly factory is a bit different from working in a garment factory or a food processing factory, as it requires high skills. This is an opportunity to train additional human resources. If we didn’t have a workplace like this here, we wouldn’t be able to train those skills either, because no one would study them.
You study and then have no job. You study, and if you want a job, you have to migrate to work in another country. Therefore, not many people study it. Even if we trained them, there would be no such factories, and we would regret for those who studied this skill. That is why this kind of arrangement is in a chain, and also the presence of the factory and the people teaching one another. With more people, the factory has capacity and skilled human resources, which can expand its capabilities, production, and assembly capacity. So up to now, the company’s participation has already reached 250 people, all of whom have received clear technical skills training to ensure the quality, safety, and affordable price of the vehicles.
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(4) CDC should be reviewing the expansion of the number of vehicle assembly companies and the market
I am proud that Uncle Norm Tong said this company is a 100% Khmer-invested company. It is true we have engineering and external partners, but the internal setup is 100%. Some companies have a certain percentage of local partners and a certain percentage of foreign ones. Thinking like this is an important point.
Reflecting further on this, I have asked the CDC—His Excellency Sun Chanthol and His Excellency Chea Vuthy—to examine further provisions: first, expanding the number of vehicle assembly companies. We think that the scale of vehicle assembly companies in the future will reach a certain level of production, even if not full, transitioning from CKD to IKD or similar. This is a large investment, not a small one like opening a coffee shop.
Second is the market. Therefore, consideration must be given to issuing licenses. Now we have 15. I want [them] to consider how many we should have at this stage, based on the demand for vehicles domestically. Most of the assembly companies supply domestic demand.
(5) The resilience of the auto assembly industry lies in the ability of each company to survive and grow
According to a report by the Ministry of Industry the other day, we currently already have the capacity to produce approximately 35,000 units per year. So, what percentage does this match with the market demand for new cars? Because some new cars still have had to be imported. Having issued 15 licenses already, should we add more or slow down? How should we handle this? In theory, the focus should not just be on the number of companies we grant licenses to open. This does not demonstrate the resilience of this sector; it only demonstrates short-term attraction. Resilience requires talking about the survival and growth capabilities of each company. If 100 open and 3 years later only 20% remain while 80% go bankrupt, then that’s it—that sector is not resilient. But if 100 open, and later there are still 100 and they continue to grow, then that is resilient within this sector. So, we should not rush to add more; we need to think about it clearly. We don’t need another 15 licenses issued this year. Let’s focus on helping these 15 survive and grow first.
(6) It is a pleasure to come and inaugurate the first factory, but it will be even more joyful to come and inaugurate subsequent factories of the company
Let us keep market security and competition in mind. We are not banning the import of cars from outside. Therefore, the market is not just locally produced cars, as some come from outside. We shouldn’t want to produce every single type locally. Right now, we have Toyota, Ford, GAC. We have how many brands? — 15 are already producing locally. So, the important thing is to consider: when should we expand? Are the current market conditions and these 15 enough? Should we put a brake on it or wait until market demand reaches 50,000, 60,000, or 70,000 units a year before we think about adding more, or what? As I said, it is a principle of helping investors survive and grow. I am very happy when invited to inaugurate a factory […] happy that the factory is newly starting. It is our pride. But I am even happier when I go to inaugurate a factory where they say this is the company’s second factory, or this is the company’s fifth factory. That means they are surviving, growing, trusting, and investing more […] Even in the American market, there are only a few companies. Among hundreds of millions of people, there are only a few major companies.
(7) The state is preparing to issue policies to encourage certain companies to support downstream/ancillary industries
We want the survival and growth of auto companies to help support the survival and growth of smaller companies that can be partners in supplying components. That is called supporting industries. Soon, we will issue incentive policies to urge certain manufacturing companies, like automakers, to assist our supporting industries. Meaning, for example, the vehicle assembly here—the other day I spoke with the Council Chairman, saying, “Uncle, the question I have is the fact that soon I will also meet with some automotive manufacturing companies, what is the current situation now? How can the state help? […] What can we do so that these car companies can help certain other companies that produce local components, to help nurture, to help create, and what does the state help with?” Now, how many components does a vehicle have? For example, there are hundreds of items: floor mats, cushions, steering wheels, headlights, mirrors. Right now, we import 100% of them from outside. Can we, in the future, connect with local partners to produce mirrors? Can we open a small and medium enterprise in Cambodia that has the capability, help them with standards, and have them become a company that produces mirrors, steering wheels, or leather seats to supply the car company or a cluster of car companies? This is our goal.
(8) Should more automotive assembly investors be needed, pick strong players instead of choosing anyone just to make up numbers
Meaning, we should help these 15 survive and grow so that they can help drive further growth. People always say, “We only hear about bans, we only hear about restrictions; there is no free market at all, it’s not open.” They do open, but they also think about the degree of help and assurance to ensure efficiency.
Our market is small. If they produce and export 100%, we do not forbid that. However, for production targeting the domestic market, we must look at the market for the products of these 15 companies—can we help guarantee the market for them to grow or not? So that they have the capacity to survive and expand further. Right now, they produce 200, but can they expand to 2,000 units in the future? We should ask that question back. How much help is needed? If there are too many players—if you drive here and see 20 more factories popping up in this place—who is going to buy all these things? What if there is no sustainability? This is different from coffee shops and noodle shops, where we don’t need to place bans.
I urge the CDC to review this. I want an evaluation: What proportion should we have? How should our 15 existing factories expand further? Moving forward, we must be selective too. If we are to add more, we must choose truly strong players, not just pick anyone to fill a quota. If they open and then shut down, it is not just a matter concerning the company alone.
(9) Constantly opening and closing companies will damage the country’s brand name, investment environment, and market
Such openings and closures affect Cambodia’s stamp of approval. Granting licenses and helping them survive is very important. Let’s not let people say “they open and close repeatedly”—like opening 100 and 5 years later, only 50 remain. That means 50% failed. That becomes a risk in doing business in Cambodia. When individual companies come to do business, they evaluate how much chance of success there is. If there are many openings and closures, it is dangerous. Especially for international brands, opening and closing and pulling out one by one is very difficult. It damages Cambodia’s stamp, investment environment, and market.
The CDC has thought about this, and we have examined certain sectors, such as cement. For cement, the association explicitly requested not to issue any more licenses. Now we have 8. Our market only demands a few million tons a year, which they already supply at around 8 million tons. Now the capacity of the 8 companies can already reach 10 million tons. There is no need to issue additional licenses […] We have closed down breweries. They can export, but local production is already plenty. Let’s help a few companies survive first to ensure their quality. Don’t let there be too much competition and too many players, which compromises quality to lower prices. That becomes dangerous. Let’s set proper standards and ensure they survive and compete to a feasible degree.
(10) Preparing policies and providing assistances to help ancillary industries thrive
The success I am talking about does not refer to the figures of starting production, but rather the figures or percentage rate of starting production and then surviving and growing. It is like a school: it doesn’t depend on how many people get a degree, but rather on the percentage of those who get a degree, get a job, and thrive. Meaning, the quality the school provides to students determines the percentage of graduates who can go out and succeed.
It is similar here. Preparing and supporting this sector by working with existing companies is a further consideration: how can we help? What kind of tax exemptions and preferences does our policy offer? What additional assistance can be given to make them survive and become an engine helping us expand other opportunities—not just direct jobs, but eventually helping ancillary industries thrive, meaning connectivity. If we can create a trade that can support these 15 automotive companies—such as making carpets or other things by creating small companies and some handicrafts that can generate that market—we can help even further.
(11) It might be difficult to become a regional vehicle manufacturing hub, but there is high potential to manufacture components
When we have high capability in the future, we won’t just be able to supply local companies; sometimes, if we have high production capacity, we can use Cambodia as a base to manufacture those components for regional distribution. Because some big companies like Toyota or Ford have component manufacturing plants in almost every country. Each country surely builds vehicles for its own market, but components can be sourced from countries like ours.
To be frank, in the future it might be difficult to become a manufacturing hub for entire vehicles for the whole region because, compared to other countries in the region, they have a higher baseline. But for producing components, we have much higher potential. As for assembling an entire vehicle in Cambodia for export, we might be a bit slower compared to some neighboring countries. However, for components—and these components hold high value […] Some might think, “What value is there in just a screw? Only the whole car has value.” No! Those screws number in the millions and require manufacturing, which can support the production of some handicraft enterprises in Cambodia.
(12) Making exported auto parts, or manufacturing tires and steering wheels for regional distribution, will create jobs and skills
The other day, I spoke with the Japanese side. They were relocating some production and looking around (various countries). They looked at the Philippines and a few other countries. Finally, they decided on Minebea. That was for bolts or something, deciding to use Cambodia as a manufacturing base for those components to distribute regionally. Just like when they went to Pursat, I told His Excellency Keo Rattanak and the CDC, “Look and see what that company needs and what we can help with. If the framework doesn’t exist yet, we will create a new incentive framework for them” to pull them in to act as a production hub (for regional distribution), not just producing for our domestic market, but feeding into their regional production chain.
If we have that, I say it is our major goal. We don’t need to export entire cars to supply the regional market. Making 10 million spare parts a year for export, manufacturing tires for regional distribution, or producing steering wheels for regional distribution — I’d say definitely creates jobs and skills. We must think of our country as part of an industrial chain or an ASEAN factory network, or with other countries. We build a car today, and tomorrow some parts might come from others. Right now, 100% is brought from outside just to be assembled. Tomorrow, some parts must be produced domestically to supply local factories. Once we are strong, we set a target to export externally and supply external production chains. This is also the goal and policy for industrial development in Cambodia.
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(13) From no domestic products to exporting apparel, agricultural, agro-industrial, and electronic component products
Promoting the establishment of assembly plants in Cambodia can help reduce the import of finished products from abroad, replacing them with domestic production that preserves foreign currency and creates direct domestic added value. Whenever we import, we pay all the money abroad, including the money for labor and everything used to assemble vehicles overseas. But when we assemble them domestically, a portion of the funds goes into employee salaries.
Selling and ensuring domestic demand also helps. We take pride in what I always say: before, we even imported a single can of soda from abroad. Back in the early 1990s, we had no domestic products at all. Now we have not only garment production, but we also export agricultural products, agroindustry, food products, and are moving towards electronic components. Nowadays, very few bottled waters and beverages are brought from outside; only certain types are. Outside of that, we use entirely domestic products. It can be said that we export most of our garments to many countries. The other day, I asked Her Excellency Cham Nimul (Minister of Trade) to meet with a group of investors from America. What did they want to come and do? They came to export our products outward.
(14) From having only imported vehicles from abroad to being able to assemble vehicles domestically for people to buy and use
In the past, we didn’t have the capability to export. Now we have high-standard products to place on markets in America and Europe. When I went to study abroad, not a single Asian store had products coming from Cambodia. Now we have more and more, meaning it shows the quality production capacity to import into those countries. Some cars we import from outside. Now we produce cars domestically for our people to buy and use. We say we haven’t reached manufacturing yet; let’s call it assembly. But at least they are assembled in Cambodia, and they have their own serial numbers. Those serial numbers now carry a Khmer country code. In the past, when we bought cars, we looked at their serial numbers, and most had foreign prefixes—coming from Arabia, America, Europe…
Now there are serial numbers assembled in Cambodia. Even if we don’t manufacture 100% ourselves, they are assembled in Cambodia by Khore/Khmer people. This is a source of pride. We aren’t just assembling horse-drawn carts or making trailers; we are making cars. Even though other countries make more than we do, we must also take pride. In the past, we couldn’t do it; now we can. That is the pride of Khmer development achieved. If we don’t have this kind of pride, no one will have pride in us. This is a small product, but it shows forward momentum.
(15) Not only creating jobs, but also promoting technology transfer, skills, and knowledge
The people of Kampong Chhnang would say those cars are made in my hometown—transforming from a province people just drove past into a place where cars are assembled and put together, produced by the children of Kampong Chhnang who work there. This helps promote technology transfer, learning how to do things step by step. This is not just about creating jobs; what is important is sustainability—transferring skills and knowledge. What does that mean? It means the Cambodians can operate machinery and certain technologies, rather than Khmer children only coming to clean outside in this factory or all engineers coming from abroad without us knowing anything when they leave for their home countries. It is skills transfer. We study in school and go straight to work because we bring in advanced technology from outside.
Yesterday, I went to inaugurate the Techo Santepheap National Hospital (Luang Me Hospital). It is a source of pride that in that hospital, we have equipped the most advanced cancer treatment machine—the newest model produced by an American company. This means it is not second-hand goods, but the newest series from 2010 or 2020 that we have installed. I immediately asked whether anyone knew how to use that machine. It is a source of pride that we have trained medical staff who can operate that machine and are expanding further. This is the transfer of skills and knowledge.
(16) Transferring skills and knowledge creates resources that help make the economy resilient
They studied to practice medicine, but upon finishing, they can go work—for instance, other hospitals in Cambodia, such as provincial hospitals, are starting to expand and open disease treatment services. Say, regional hospitals in the future can treat cancer. Thus, the skills they gained from Luang Me can be taken with them. The number of people in Cambodia who can use advanced machines to treat cancer is increasing. Those who can operate robotic machines in the automotive assembly chain can upgrade in the future when we do something else. This is a transfer, a creation of resources that helps our economy become resilient. Those skills do not go anywhere; once they learn and come to work with experience, only if they lose their memory will those skills be lost.
Knowledge is within oneself. No matter how external conditions and things change, knowledge does not go anywhere; resources remain the same. This is training and transfer—this is what we want. Therefore, our labor law states that when opening a factory or a company, only a certain percentage can come from outside, while the rest must be local. 10% from abroad, 90% must utilize local human resources.
(17) Local factories will recruit Cambodian staff according to legal requirements combined with economic considerations
We cannot open a factory where 90% are foreign and only 10% are Cambodians, performing minor services while everyone inside is foreign—that is not allowed. That transfers nothing. When they finish and return to their home countries, what are we left with? We demand a maximum of 10% [foreign staff]. This is our law. There are exceptions for certain skills, for example, controlling airport towers or flying airplanes where there are only 20 people and we don’t have the expertise yet. Sometimes we allow time for training […] But for large-scale operations like this, what is the purpose? The purpose is, first, job opportunities, and second, to give the Cambodians the opportunity to study, operate, and acquire direct skills from there.
I believe foreign investment companies feel the same way—whether Khmer or foreign-owned, no foreign company coming to invest wants to carry 1,000 or 500 people to work here; paying their salaries alone is unsustainable. They will want to hire staff locally in Cambodia. If they opened that factory abroad and just imported cars, they wouldn’t have headaches over this—just sell them if they sell. Opening a factory in Cambodia, they must have staff, and to secure staff, they must hire Cambodians according to the law, combined with economic considerations. So they must teach the Khmer children; they cannot hide it. That chain must teach everyone to do everything. If they don’t teach everyone, it means their car quality will not be good.
(18) Visible proof showing the expansion of people’s capacity and proficiency as a key principle
Setting the main direction – training combined with employment. Leaving school provides a degree or certificate, but working directly provides visible proof of capability. We want more visible proof. It is this visible proof that expands people’s capacity and proficiency. We study in school and can solve equations given by a teacher, but stepping out into real-world situations, we certainly have had to use that foundation to solve new experiences. That is why creating a factory here—which currently creates 250 jobs, including some technicians as a start—retains resources that will not go anywhere. As I say, once they learn, barring illness, forgetting, or passing away, that capability is not lost. They are resources that will spread across the country in the future. If they work here and continue to grow, later they can upgrade their skills or move elsewhere, capable of taking skills from here to further promote our production and industrial sector.
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(19) Numerous competing players lead to methods that sometimes compromise quality
(Supporting heavy industries and high-value additions, not just traditional garment, and agricultural sectors)—this is what I mean by ensuring they survive and grow. Let’s not have it so that Cambodia only succeeds in garments while car companies keep going bankrupt, lacking people, lacking workers, or having insufficient policies including a degree of market guarantee. Help them. The space—we don’t guarantee specific sales volumes, but we leave the environment for them to compete without having too many players. This is an important factor. To survive, numerous players in each company must resort to certain methods. Sometimes it affects quality.
The most concerning impact is cutting prices to secure market guarantees. But cutting prices reflects cutting quality. Now, if production according to standards costs this much per unit, what must be cut? Don’t make this part too good; that’s expensive, let’s use this cheaper type. If handled poorly, removing engines casually, and fooling around with brakes—that’s the end of it. A brake costs $5,000; failing to win the competition, they take a $1,500 brake and install it, and stepping on it a bit fails—that’s a problem. That’s just an example. But I speak of this specifically regarding the automotive sector, while reflecting on certain sectors we have considered and faced situations with, especially large-scale investments like this.
(20) Providing human resources, protecting trust, and safeguarding Cambodia’s reputation and investment environment
We must figure out how to guarantee growth and ensure the trust of the domestic and international investment community, especially international, because GAC is an international company, and Chevrolet, Toyota, BYD, and Ford are all international-level companies. So, we must guarantee it. The stamp of approval is important. They open, they grow, and they build trust. I remember when we looked at selling handbags and things, there are certain leading brands. Brands like LV, Hermes—once they enter somewhere, medium, and small players are trusted because those leading ones have studied thoroughly.
So by the time we get international brands to invest this much, it’s not like all those companies haven’t studied it. GAC has studied the market; handling things poorly would ruin their worldwide brand. So there must be trust—both capacity, legal regulations, and quality business incentives. Most importantly, we have the capacity to provide various human resource demands. So how do we ensure we don’t forget to protect trust, protect the environment that safeguards Cambodia’s reputation and investment environment? Thus, guaranteeing both their licensing and their operations […] that is the duty of the CDC, ministries, institutions, and provinces.
(21) Reforming the CDC to enhance capabilities in attracting, facilitating, caring for, and helping resolve issues
His Excellency Sun Sovannarith (the governor of Kompong Chhnang) is here. We have tried hard to help after the opening (of this fatory), but don’t forget that once opened, do not abandon them—you must continue to care for and look after them. Those small details are very important; small things add up to big things. Sometimes the speed of resolving a tiny issue affects the value of the entire production. Their plans stall because they are busy requesting documents and getting blocked without approval; it takes too long, ruining their chain and annual or multi-year plans. The CDC has worked hard; we created a forum.
His Excellency Sun Chanthol sometimes calls and tells me, “Samdech, today from morning until night I scheduled meetings with 10 companies, one hour per company, sitting and listening to what they need help solving.” Now we are reforming the CDC to enhance its capacity to help solve these issues—attracting, facilitating to get investments started, caring for, and helping resolve problems when they arise. So, each province, once you attract [investors], don’t forget to guarantee and care for them. I believe that when they come to Kampong Chhnang to open this company, it isn’t without the support and active efforts of all stakeholders, especially the local level. If they come and cannot even resolve land issues, what can they do? This is an important factor. If a leading company comes and goes around telling others where to set up their projects […]
(22) Kampong Chhnang stands centrally between the east and west of the Tonle Sap, alongside the Funan Techo Canal route
(People may think if they invest) in Kampong Chhnang—it’s a bit far from Phnom Penh, far from Kampong Som, but the province helps, it’s smooth, no problem. Speaking of connected infrastructure, Kampong Chhnang province can become a central hub, especially bridging the east and west of the Tonle Sap right there. It is close to the road heading to Kampong Speu. In Kampong Speu, we are building Road 44 through to Koh Kong, and Kampong Speu to Kampong Som. Now our roads crisscross. In the past, we said going to Kampong Speu is difficult; now Kampong Speu’s industry is booming, spilling over to Kampong Chhnang, and Pursat is starting to grow too.
So, I say National Road 5 and the industrial zone, up to there, form the agro-industrial corridor, but this road—the Kampong Chhnang, Pursat, Phnom Penh chain connected via Kampong Leng, Road 50C with Kampong Thom—is entirely industrial and manufacturing zones. Soon, transportation will feature the Funan Techo Canal route arriving at the multipurpose port we plan to build to connect with it. So later, transporting goods to Sihanoukville Port and loading them onto ships somewhere will be cheap. Kampong Chhnang province has huge potential, but it depends on knowing how to harness it. Having good things doesn’t guarantee attraction unless the trust environment exists.
(23) Implementing the principle of “make it easy to live, easy to thrive” for domestic and foreign investment
I see each province striving and competing, going out to attract clients themselves and working hard to keep clients happy when they arrive. This is an important task. The Royal Government can only issue incentive policies, but how it is (up to the local authority to) implement—ensuring no problems, keeping investors happy, both domestic and foreign investors—making them happy, letting them thrive, letting them live easily, making it easy to live and easy to thrive. That is the principle. When the private sector thrives, it helps the Royal Government immensely in creating jobs and helping solve incomes.
Businesses make a profit and pay taxes. We use those taxes to build roads and things, pay salaries to civil servants, and expand potential to incentivize the private sector further. We do drop some taxes, but we drop them to make them thrive. Thus, we can drop certain tax duties. But when they thrive and move forward, tax revenue comes in—left pocket, right pocket. This is a point that must be protected. The confidence of international and national investors in Cambodia lies not only in our capacity to guarantee the supply chain, but also in guaranteeing the environment…
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(24) SMEs are specialized companies expert in specific products
(… ancillary industries remain limited …) This is what I mentioned just now. We want to expand SMEs internally because the formula or approach we are pursuing is to promote SMEs. We don’t necessarily need to rely too heavily on giant corporations. We help incentivize giant corporations too, but they don’t need to be numerous. No country has many giant corporations, but they have many small SMEs, and each company can be a manufacturing company specializing in a specific product. Solving the production chain, considering additional incentives during periods when we face border conflicts and port closures—opportunities for expansion must be viewed from two angles.
One angle where we experience negative impacts requires finding ways to solve and minimize difficulties, but at the same time turning them into opportunities to strengthen what we can do. Among these, the expansion of domestic products must be sustainable. When an opportunity arises, use it to ensure sustainability—not just growth in numbers, but growth in quality to ensure long-term markets.
(25) Buying domestically produced cars is a national pride, but without guarantees on market, price, and quality, it won’t work
SMEs play an important role, and the Royal Government through the Ministry of Industry, Science, Technology, and Innovation has also acted as a key staff agency in implementing this principle. Another set of tasks must be considered as a package, not separately. Meaning, we don’t incentivize only car companies while failing to incentivize connected companies. So, we must consider how much we can produce, how many parts are in that car body, and how many can be made locally. We consider it as a package, a complete chain.
Let’s not have expensive components brought in for assembly, making the final product expensive anyway. So, if we want that car to be cheap so our people can buy it—since it’s domestically produced as a national pride—without guaranteeing the market, price, and quality, it’s not a good choice either. If we want local components to be used, we must help incentivize both component manufacturing, quality, and price so they intertwine, resulting in a final car price that is reasonable and competitive so our people can buy it.
We want citizens to have the ability to afford new vehicles at reasonable prices without having to impose bans on second-hand car imports. We cannot tightly ban them like some countries that forbid entry and require buying only new ones. No, we let our citizens decide. If a second-hand car costs a certain amount, but a new car with good quality costs around the same, I will buy the new one. Right now, people are riding them so much, especially EVs […]
(26) The competitiveness of domestic assembly companies is support services
Indeed, we are implementing some temporary measures regarding tax reliefs for imported EVs, while also considering the health of domestic assembly. If importing from outside is cheaper, then that’s it—there’s no need for domestic assembly, and domestic companies might as well just import from outside. But we will help to a certain degree, considering sellers, citizens, and manufacturers to maintain a balance.
There was a question from the automotive sector asking how our tax-reduction policy will work, given that it might face competition from domestic production. We have considered this. However, during the Middle East war crisis driving up fuel prices, we lowered taxes on certain machinery and vehicles using EVs to enable people to use them. But ultimately, it still depends on quality, price, and especially support services. They say one competitive edge of domestic assembly companies is support services, because buying from a factory comes with a warranty. Buying from outside sometimes means returning to a dealer without knowing how they honor warranties, but here support services are important.
I asked Uncle Norm Tong—vehicles from here have a warranty of about 2 years. So customers know there is a company that isn’t going anywhere. One positive point of local assembly is precisely that support service. It is very important: buying equipment, and when it breaks down immediately upon purchase, returning it only to wait 3 months or finding no one who can fix it. Modern car technology doesn’t allow that anymore. Today’s tech cars—change a single headlight and sometimes the car won’t move if you don’t calibrate the lights properly. So it requires guaranteed service…
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(27) Think by sector, not by individual company; if we help, we help the entire sector
Our directional vision and policy are not just to do CKD production, assembly, and export, but to gradually move towards IKD (In-Knocked Down), component manufacturing, creating skills, and eventually exporting cars or components as I mentioned above. This is our vision; we can do it. What is needed is coordination and setting up coordinating mechanisms, setting directions to help drive this, playing a key role especially through the CDC, thinking in terms of entire sectors rather than individual companies.
I believe Uncle Norm Tong won’t be unhappy either if we don’t just help his company, but help the entire sector. We used to have proposals and feedback suggesting we should help this sector by allowing this company to import this tax-free to gain investment capital to drive implementation, such as for transportation or logistics. But I say no; if we help, we help the entire sector. All players within it must get equal benefits. If we help only one person, where do the others go? Second, it creates unfair competition. We provide certain incentives—some vehicle assembly companies were given certain short-term incentives, but we cannot give them anymore.
(28) Considering the entire sector, ensuring a fair environment, transparency, and fair competition
There was a company whose proposal I disagreed with two months ago. It was submitted through policy channels requesting to establish a car assembly company, but with a condition granting them 4,000 duty-free free cars imported first to establish capital. I said no. What we must do is ensure that whatever we used to give to any place can at most match that, and we incentivize the entire sector at once. All players must walk together and be considered within the sector.
Companies compete in producing quality products, setting different prices, but in some areas, we must consider making the entire sector thrive. Thus, policy-making is not aimed at incentivizing or granting privileges to any single company while denying others. To ensure a successful competitive environment, we will grant it to the entire sector collectively. That is why we must meet with all automotive companies. If we are to develop any type of ancillary industry, we are not just talking about this or that company partnering with this partner and giving them everything. We consider it as a package for that sector. If someone manufactures mattress pads or anything linked to cars, it is considered right within that framework. People who make these things linked to the automotive industry should be treated equally. That is how to properly ensure fairness, transparency, and fair competition in executing correct policy. We must not help 1 company while killing 10; we must help all 10 equally so they have equal bases to compete […]./.
