T h e decisions to establish import-substituting automobi le industries in Malaysia and Tha i land were m a d e by national leaders. Probably n o industry has b e c o m e as polit icized as the automobi le industry which is n o w regarded as vital to their respective national e c o n o m i c deve lopment strategies. This is partly because an automobi le is a c o m p l e x product , consisting o f about 3,000 parts and c o m - ponents , and involving different product ion processes and considerable specialization. T h e industry brings together an immense variety o f c omponents and parts, m a n y o f which are manufactured by independent supplier firms in other industries such as textiles, glass, plastics, electronics, rubber, steel and other metals. H e n c e , the e m p l o y m e n t effect o f developing the automobi le industry is expected to b e strong because o f the considerable linkages with other industries. Foreign auto makers are also expected to make various contributions to the host e conomy , in terms o f techno logy transfer, skills training, technical progress and stimulating the deve lopment o f small-and medium-scale industries.