In a tweet that made many automobile fans smile, Prime Minister Najib Razak reaffirmed in late May that car prices will come down gradually in the next five years.

"As promised, car prices will be reduced in stages until 2017. Insya Allah, I will ensure that every promise is fulfilled," Razak's May 28th message said.

Prior to Malaysia's general election on May 5th, the ruling Barisan Nasional coalition had pledged to review the National Automotive Policy (NAP) and reduce automobile prices between 20 and 30% in the next five years – without subsidies.

According to International Trade and Industry Minister Mustapa Mohamed, the wheels are already in motion. Since October 2012, he told reporters, prices of ten popular models have come down by an average 7.3%, including vehicles made by Nissan, Hyundai, Honda, Toyota, and Ford, and local brands like Perodua and Proton.

Business Times Managing Editor Mustapha Kamil Mohd Janor said the announcement is timely.

"Cars are no longer considered as luxuries but a necessity," Mustapha said in a statement. "One indication is the car price issue being a hot topic in the election campaigns."

Scaling up and meeting standards

But, given the reality of production costs, the industry must work towards the government's pricing goal. Manufacturers are looking for new efficiency without compromising quality.

Perodua Managing Director Aminar Rashid Salleh said achieving the NAP's pricing goals will require the industry to examine production methods to maximize efficiency and raise quality standards to compete with international brands.

Perodua, the country's second largest car manufacturer, recently announced the building of a RM 790m ($256m) plant in partnership with Daihatsu Motor of Japan. Scheduled to be operational by mid-2014, the plant is expected to have an annual production capacity of 100,000 vehicles, compared to the present rate of 9,600-12,000 annually. This move will naturally lead to enhanced job opportunities for the local people.

Yeap Swee Chuan, who heads Malaysia's AAPICO Hitech, the biggest car components manufacturer in Asia, said that meeting global quality standards simply means zero defects.

"A car can have 5,000 parts, but if you have 20 parts that are no good, then the whole car is no good," Yeap told Khabar Southeast Asia. "The challenge here is, if there are different vendors for different parts, you must ensure all the vendors are able to give good quality. That is what I call world-class manufacturing."

Ambitions for the Malaysia's automotive industry are high.

They include making the local market an attractive investment venue for car manufacturers, making Malaysia a regional hub for energy efficient vehicles, and creating a green automotive industry, according to Malaysian Automotive Institute CEO Madani Sahari.

"With promises of lower carbon emissions and fuel efficiency, it doesn't make sense for production to pollute the environment," Madani told Khabar.

Courting investment

Realizing all these ambitions will require greater outside investment – something the government can encourage through incentives and stability, industry players said.

Managing Director Ben Yeoh of Bermaz Motor, dealer for Mazda cars in Malaysia, said, "Incentives in taxation structures for example, will give much confidence to investors."

Aishah Ahmad, head of corporate affairs for Sime Darby and president of the Malaysian Automotive Association, said the government should create a level playing field for all car manufacturers.

"We have to give investors the confidence to invest in Malaysia," she told Khabar. "Stable policies are something that will attract them."