Market liberalization under AFTA is intended to rationalize regional production in ASEAN by forcing inefficient firms in member countries to exit while efficient ones garner economies of scale by producing for the ASEAN market instead of just their home market.  Are Malaysian manufacturers equipped to face the increase in competitive pressures with the market liberalization measures under AFTA? It is the main objective of this chapter to ascertain the competitiveness of Malaysian manufacturers and their capacity to meet with the challenges of AFTA.  Publication/Conference: 4th International Malaysian Studies Conference; 3-5 August 2004, Universiti Kebangsaan Malaysia, Bangi.  Author: Tham, Siew-Yean.