US Embracing Compact Cars: Opportunities for Malaysian Automakers?

US President Donald Trump has highlighted Malaysia’s compact, fuel-efficient vehicles as an example for the United States, which is now moving to remove regulatory barriers that previously limited the production of small cars domestically.

Speaking at the White House on Wednesday, Trump noted that countries like Malaysia, Japan, and South Korea show how smaller, affordable cars remain popular and practical for everyday use. 

Trump added that similar models could appeal to US consumers but were previously restricted by regulations. “I’ve authorised the Secretary to immediately approve the production of those cars,” he said, announcing new US fuel economy standards.

US Secretary of Transportation Sean Patrick Duffy confirmed that the regulatory restrictions have now been cleared. “If Toyota or any other company wants to make smaller, more affordable, fuel-efficient cars, we have cleared the deck so they can build them in America and sell them in America,” he said.

Trump made these remarks after attending the 47th ASEAN Summit in Kuala Lumpur, followed by trips to Japan and South Korea and China. 

The recent Agreement on Reciprocal Trade (ART) between the US and Malaysia adds an interesting angle. Under the agreement, Malaysia has committed to accepting US-manufactured vehicles built to US motor vehicle safety and emissions standards.

With the US signaling openness to compact car culture, new opportunities could emerge for Malaysia’s compact car brand, Perodua. The company could explore exporting left-hand-drive models to the US or even consider establishing a presence in the market, leveraging its size and potential demand.