MATRADE`S AUTOMOTIVE MISSION SCOUTS FOR BUSINESS OPPORTUNITIES IN GERMANY By Manik Mehta

FRANKFURT, Sept 24 (Bernama) -- A seven-company strong Malaysian automotive
mission, organised under the aegis of the Malaysian External Trade Development
Corporation (Matrade), has been scouting for business opportunities in
Germany.

The mission, which on Tuesday completed a four-day visit to Germany,
earlier
attended the just-concluded Automechanika trade fair in Frankfurt, where it held
10 meetings with buyers of original equipment manufacturer (OEM)
products.

The mission, led by Matrade's Susila Devi, Senior Director (Products and
Services Development), who is considered to be one of Matrade's top experts on
foreign business development, called at the Wolfsburg headquarters of the German
automobile giant Volkswagen which "flirted" for some time with the idea of
taking over Malaysian carmaker Proton.

"Volkswagen had organised meetings with the Malaysian companies with its
purchasing/procurement and quality control people," Raja Badrul Nizam Raja
Kamalzaman, the Cologne-based Malaysian trade commissioner, told
Bernama.

Volkswagen finally narrowed down its choice to four Malaysian companies
which later participated in one-on-one meetings at the company's
headquarters.

Volkswagen had asked quotations for the supply of automotive wire harnesses
from a Malaysian company called JK Sumi Wire Harness.

"But the Volkswagen interlocutors were, generally, happy that Malaysian
quality standards meet Volkswagen's requirements, eventhough the Malaysian
suppliers will be required to fine-tune their supplies to Volkswagen's
specifications," Raja Badrul explained.

Another Malaysian company was asked to provide samples of rubber hoses and
car mats along with quotations. Volkswagen showed interest in procuring rear
lights, holding out the prospect of giving volumes of some 280,000 pieces per
year.

"This is indeed a huge volume," said one Malaysian company representative.

Volkswagen is also interested in other kinds of lights such as interior
lights. Obviously, Volkswagen wants to broaden its supply base in Southeast
Asia by considering Malaysia as a source of supply.

In a conversation with this correspondent after her meetings with
Volkswagen representatives, Susila Devi observed: "Our impression is that there
is lack of awareness among German companies about Malaysia's capability to
supply parts and components on OEM basis.

Thus, the Germans were surprised that Malaysia has been supplying to big
names such as Toyota and Honda.

"Our coming here has been an eye-opener for the Germans who realise that,
unlike China, Malaysia can supply good-quality value-added products at
competitive prices. By talking to them on a one-on-one basis, any doubts they
had about Malaysia's ability could be removed," she said.

She confirmed that some of the Malaysian companies in her delegation were
asked to provide designs and quotations. Volkswagen, she said, was very keen
to source from the Asia-Pacific region and Malaysia stands to gain from this
move.

Indeed, Volkswagen had taken a decision to set up a regional sourcing
centre in Singapore which will benefit Malaysia immensely.

The delegation also visited the headquarters of another major German
industrial company called Miele which manufactures washing machines.

"The delegates met the heads of the purchasing department, dealing with
plastic and rubber components and moulding. Three Malaysian companies were
short-listed for individual talks and were given specifications of Miele's
requirements.

"Miele representatives were satisfied with the quality standards of
Malaysian products and said they will visit the plants of the suppliers in
Malaysia," Raja Badrul said.

The delegation later visited the state of Baden-Wuerttemberg in southern
Germany.

"We had a meeting with the Baden-Wuerttemberg Landesbank whose specialist
for the automotive sector, Matthias Pohl, explained the future direction of the
automotive industry.

He highlighted the criteria which Malaysian companies will be required to
observe to qualify as automotive suppliers to Germany which is implementing the
new EU regulations on carbon-dioxide emissions.

"This will mean that suppliers will have to pay greater attention to the
tightened standards which will require new technology," Raja Badrul said.

The Malaysian delegates held a total of 20 one-on-one meetings in
Stuttgart. In fact, three of the companies were invited to visit the R+D
centre of some German companies near Stuttgart.

However, Germany is currently in a near-recession situation which is
inhibiting buyers from placing large orders.

This was also evident at the just-concluded Automechanika trade fair where
33 Malaysian exhibitors said there were not enough buyers.

The exhibitors were divided into two groups, one under the aegis of the
Federation of Malaysian Manufacturers and the other under the Malaysia Rubber
Export Promotion Council.

Malaysia is generally viewed as a reliable supplier of good quality
products.

Its exports of automotive parts and components to Germany, according to
Matrade, amounted to RM26.39 million in 2007 while exports from January to July
2008 amounted to RM17.28 million. (US$ = RM3.4)

But, as one optimistic Malaysian put it, this was tantamount to "merely
scratching the surface".

"The potential for business is huge," he added.