Penang is regional engineering centre for Clarion

• R&D, technology enhancement and sales part of operations
• Only makes products that it develops inhouse

TOGETHER with Japan and China, Penang is a unique part of the Clarion group, with the full integration of services from manufacturing to technology development, sales and marketing being based here.
 
“We are very proud of the fact that after 42 years, we only make products that we develop. We do not transplant any product from the other Clarion operations,” says Clarion Malaysia managing director T.K. Tan (pic).
 
“So anything we provide to clients from South-East Asia and beyond are actually developed here,” he adds.
 
Clarion of Japan planted its first operation in Penang in 1970, starting with manufacturing. Research and development (R&D) came in the1990s and the company here started dabbling in technology development in 2000 where, instead of product integration, it moved up the value chain into technology enhancement.
 
“For instance, we developed our Bluetooth module in-house, and today are working on our most interesting product, an Android-based car stereo to address the connected car issue,” says Tan.
 
The product is conceptualised and developed here with Clarion Penang working with partners across Europe and the “best of the best” industry specialist software houses.
 
At the same time, it has also started reaching out to local software companies to expose them to the opportunities that exist for them in the in-vehicle entertainment market.
 
It is working with CREST (Collaborative Research in Engineering, Science and Technology) to engage with this group. “We want them to know that the in-vehicle automotive entertainment industry has moved on to become software-based and that all have the opportunity to play in it,” says Tan.
 
Surprisingly, Tan says Clarion is not very keen on Intellectual Property (IP) development. “That’s because, in the market we are in, our product has a turnover cycle of 12 months. Products change very fast,” he observes.
 
Clarion Penang invests a lot in R&D to ensure it gets the right products out into the market with yearly investments in the “tens of millions in ringgit,” he claims.
 
With Penang safely ensconced as the regional engineering centre, there is little to be concerned about the eventuality of Clarion Penang, with a staff strength of around 350, moving operations to a lower cost centre.
 
Tan acknowledges however that there are cheaper locations for manufacturing, but reminds Digital News Asia (DNA) that there are many facets to the chase for lower costs – and that low costs do not tend to stay low cost for long.
 
Malaysia, with its stable and business-friendly environment, and weather that is not extreme or prone to catastrophes, has been a stable hub over the last 42 years and “that is very difficult to replicate anywhere else,” he says.
 
Then there is the challenge of consistency. “I have seen operations go into other countries where you then end up as a training school as there is a shortage of talent and everyone ends up pinching from each other, driving up the cost. After five years, the locations are no longer cheap,” he says.
 
For Tan, being based out of Penang works great as everyone is comfortable with the location and there is a strong local pool of consistent knowledge workers. But, as an executive who spends six months of his time travelling, he concedes that better international connectivity out of Penang would greatly help with transit issues.
 
Switching from transit to talent, touching on the pool of engineers coming from university, Tan says he would like to see Malaysia emulate the German model where apprenticeships play a vital role in ensuring industry actually hires engineers and not, as Tan puts it, “students wanting to be engineers.”
 
He feels the German apprenticeship model has to be looked as closely by Malaysian universities if they are serious about producing top-quality graduates in engineering.
 
In tandem with this, Tan hopes to see more efforts made by all parties to try and inject some excitement into the math and science fields to get youth excited about the career possibilities there.
 
“We need to make career paths in Math and Science sexy to these kids,” he says, adding that Clarion makes its exposure to its fresh hires both interesting and tough.
 
“But we tell them that the knowledge they are receiving from us allows them to compete head on with their peers globally, not just in Malaysia,” he adds.

 
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