Korea vs Malaysia: Small Car Benefits and National Car Projects

Hi, I’m Sophie, a Korean living in Malaysia.

 

I never really paid much attention to cars. A few years ago, my younger brother in Korea bought a small car (a 경차). At the time, I didn’t think much of it. But one day, when I went with him to a parking lot, I noticed the fee was much cheaper than I expected. For a moment, I thought I had misread it. That’s when he explained: under the Korea small car policy, light vehicles receive many benefits such as cheaper parking, toll discounts, and lower taxes.

 

That moment made me wonder — does Malaysia have something like the Korea small car policy, or is it completely different?

 

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Korea’s Small Car Policy – Roh Tae-woo Administration

The Korea small car policy officially began in 1991 under President Roh Tae-woo’s administration. Cars under 800cc were categorized as “light cars,” and the government introduced several benefits:

• Reduced purchase and registration taxes
• Up to 50% discount on highway tolls
• Up to 80% discount in public parking lots
• Lower insurance premiums

This was not just about cheaper cars. It was a national strategy to reduce traffic congestion, fight air pollution, and make life easier for ordinary citizens in crowded cities. Later, the limit was raised to 1,000cc, but the Korea small car policy remains active today.

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Malaysia’s National Car Project – Mahathir Mohamad’s Vision

Unlike Korea, Malaysia has no special benefits for small cars. Instead, its focus was on the Malaysia national car project, launched in the 1980s under Prime Minister Mahathir Mohamad.

• 1985: Proton was founded with Mitsubishi’s support
• 1993: Perodua was founded with Daihatsu’s support

Through high import taxes and incentives for local brands, the Malaysia national car project gave birth to Proton and Perodua, which still dominate the market today. In fact, these two companies account for more than 60–70% of car sales in Malaysia. Models like Proton Saga and Perodua Myvi are seen as true “national cars.”

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A Personal Reflection – A Conversation With Friends

I once had a conversation with friends from Japan, Thailand, Malaysia, and myself as a Korean. We compared industries in our countries. Japan and Korea had strong automobile companies. Malaysia had Proton and Perodua, the result of the Malaysia national car project. But my Thai friend admitted, “Thailand never really had a government-backed car brand.”

 

At that moment, I realized how significant Mahathir Mohamad’s vision was. Of course, his policies were controversial — some criticized them for being racially biased — but still, he managed to create not just one, but two national car companies. In Southeast Asia, that makes Malaysia unique. Thailand excels in car assembly and exports, but it has no national brand. Malaysia does.

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Different Approaches, Different Cultures

• Korea small car policy: Encouraged small cars under Roh Tae-woo → cheaper tolls, parking, and taxes for citizens
• Malaysia national car project: Launched by Mahathir Mohamad → protection for local brands, creation of Proton and Perodua

In Korea, driving a small car is seen as “smart and economical.” In Malaysia, owning Proton or Perodua is about affordability and supporting national industry.

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Conclusion

What began with me being surprised at a cheap parking fee led to a bigger reflection. The Korea small car policy under Roh Tae-woo was designed to solve urban problems and support citizens, while the Malaysia national car project under Mahathir Mohamad aimed to build an independent automobile industry.

 

Both approaches shaped car culture in their countries very differently — one focused on the size of the car, the other on the origin of the brand. Comparing Proton and Perodua with Korea’s small car benefits shows just how much policy decisions can change everyday life.

 

Thanks for reading! Hope you found this comparison interesting, and see you in the next post :)