Malaysian auto parts manufacturers have spent years building a reputation for product build quality and supply reliability, exporting their products to several automakers around the world. Appealing to Japanese automakers, however, is another story entirely. A contract with a major manufacturer there offers lucrative rewards and increased stature, but Japanese thoroughness and taste for flawless quality present extra challenges to suppliers.

Some Malaysian companies were making inroads into the Japanese market even before the 11 March disasters in Tohoku damaged supply chains. The two countries signed a five year Economic Partnership agreement in 2006, with an auto industry component providing a skills training center in Malaysia and a number of trade shows.

 

Malcorp_parts

Since March, many Japanese companies have expressed a desire to diversify their risks by teaming up with manufacturers in other Asian companies and Malaysia has found itself in a prime position. Trade agencies JETRO and MATRADE are aiding firms to find each other and achieve profitable outcomes on both sides.

The recent Malaysian Auto Industry Exhibition (MAIE) in Yokohama saw 11 Malaysian manufacturers pitch directly to Japanese industry players.

Malcorp, or the Malaysian Consortium of Rubber Products, represents a group of companies producing a variety of rubber products including engine mounts and bushings for clients in Japan and Europe.

I spoke to Malcorp CEO Serajudin Ismail on the challenges of exhibiting and doing business with Japan, and his advice on Malaysian companies looking to extend their ties:

What kind of response did you get from Japanese trade show attendees at the exhibition?

The response was somewhat encouraging with trade leads from OEM customers as well as the After market. The enquiries received were more for rubber to metal bonding automotive parts. They were looking at outsourcing possibilities with Companies from the Asean region.

In fact we hosted a visit by one of the show attendees a week after the show.

Have Japanese companies become more interested in partnerships with Malaysian manufacturers recently?

It does appear so. With primary raw materials produced in Malaysia i.e. rubber, they seem interested with us hoping that it would be more competitive to source from Malaysia. They are also more confident with Malaysia being a center for consistent quality and delivery schedules.

What is the most important point of difference between doing business in Japan, and in Malaysia (or other countries)?

Japanese are more careful. They will need to know the background of the suppliers, their capabilities, skill and resources in more detail before deciding who they want to work with. The usual question they ask is, are we already supplying to Japanese companies? With other countries, Malaysia stands out as a supplier of quality products and they don’t research too much as compared to the Japanese. If Japanese companies decide to work with any of us, they are sure they will be getting what they want. This takes time. While for other countries, they check prices and samples if they meet their requirements. They have no doubts about Malaysia’s quality standards.

Selling to Japan will always be feather on the cap. It is a plus point and added credibility and selling to other countries becomes lot easier.

Was the advice you received from Jetro or Matrade useful for marketing to Japanese?

Yes indeed. They are very serious to see the expansion of trade between Malaysia and Japan.

Do you have any other advice for manufacturers looking to appeal to Japanese partners?

They must appeal to Japanese companies with R&D facilities, quality control procedures, skilled workers and possess quality accreditation certificates to win Japanese confidence. Malaysian manufacturers should venture out to meet Japanese customers by participating in exhibitions in Japan and show them what quality products they can offer at competitive prices. Wherever possible, if joint venture possibilities are available, this would be an added advantage to find markets in Japan.

Strive to get one Japanese customer at least to start with and then the second becomes much easier. Once you succeed selling to Japan, getting the next Japanese customer gets easier and you can next sell to the world much easily.

 

by Jon Southurst, Tokyo