The Malaysia Automotive, Robotics and IoT Institute (MARii) and Bank Muamalat Malaysia Berhad (Bank Muamalat) inked a memorandum of understanding on the development of an Automotive Vendor Financing Programme.
The purpose of the programme is to assist automotive parts and component manufacturers registered under MARii in gaining access to better banking facilities to improve cash flows while doing business with car manufacturers (OEMs).
The Automotive Vendor Financing Programme is expected to benefit 100 selected vendors from the automotive industry.
Signing the MoU in MARii Corporate Satellite Office in Kuala Lumpur today were MARii CEO, Dato’ Madani Sahari and Bank Muamalat, Chief Executive Officer, Khairul Kamarudin.
In order to expand opportunities with new customers, the selected automotive vendors would require new vendor financing facilities to support the growth of new business lines whilst ensuring steady supply of parts to their customers. This may come in the form of investments to expand operations and facilitate procurement of raw materials and sub-components.
These new investments are crucial as vendors would require more access to funds to ensure their manufacturing technologies and capabilities are in line with the demands of Industry 4.0.
Through this MoU, MARii will identify eligible automotive vendors for various OEMs operating within the country, and serve as a referral for the vendors as well as act as the advisory focal point to Bank Muamalat on automotive industry knowledge.
“Technology investments require long term, data driven strategic planning to mitigate the associated risks, therefore also requiring innovative supply chain financing packages that are attractive to both industry players and the banking sector. This MoU signifies an important step to allow the banking sector in Malaysia to be more inclusive into the intricacies of this high technology sector,” said Dato’ Madani.
In order to be eligible for the Automotive Vendor Financing Programme, selected vendors will undergo specific value chain development programmes organised by MARii, such as the Lean Production System (LPS) programme, Automotive Supplier Excellence Programme (ASEP), CEO Growth Mindset Programme (COGMP), Design Engineering Programme (DEP), etc.