THE COMPARATIVE ANALYSIS BETWEEN THE STRATEGIES OF MALAYSIA AND INDONESIA IN DEVELOPING ELECTRIC VEHICLE INDUSTRY TO ATTRACT FOREIGN DIRECT INVESTMENT (2015 – 2019)

Abstract

In 2015 Malaysia and Indonesia attempt to develop electric vehicle industry in order to fulfill the commitment in reduce the environmental damage. As developing countries, both Malaysia and Indonesia still need to seek the capital income from other country to develop electric vehicle manufacturer which is FDI. This paper attempts to analysis the competitiveness between Malaysia and Indonesia in attract foreign direct investment. The analysis of competitiveness will use Porter Classic Diamond Model which focuses on nation’s competitive advantage. The Diamond Model will cover the analysis in factor conditions, demand conditions, related and supported industry, and firm strategy, structure and rivalry. In the result of analysis show that Indonesia benefits for FDI in labor wage sector, cluster industrial complex, incentives for consumer, automotive annual sale and availability of natural resources. Meanwhile, Malaysia attract FDI in sector human resource development, import tariff on battery and natural resources, GDP per capita, car density ratio, incentives for producer and ease of doing business.