Malaysia Car Industry Essay Research Paper 10

Malaysia Car Industry Essay, Research Paper

1.0 MALAYSIA CAR INDUSTRY

1.1 Background

Malaysia is one of the smaller Southeast Asian markets for motor vehicle production and sales and ranks behind South Korea, the People’s Republic of China, Taiwan, Thailand and Indonesia. Since 1985, when the first made-in-Malaysia car, Proton rolled off the production line, it have been spearheading Malaysia’s ambitious plan to become one of the world’s most advanced industrial societies by the year 2020. To date over one million Protons have been sold in 51 countries throughout the world. By contrast, Malaysia’s motor vehicle industry actually remains heavily protected with import duties ranging from 140 to 300 percent on cars, and very high local content requirements. Malaysia also maintains an import ban on motor vehicles from Israel and South Africa. These protectionism clause in large has made Proton to became the number one best selling passenger car in Malaysia. It has also maintained a huge market share of over 50% since 1987 from it infancy beginnings in 1985.

1.2 Market Review

Year 1998

Position Makes Sales Unit Share

1 Proton ( EON ) 67595 49.5%

2 Kancil 38921 28.5%

3 Proton ( USPD ) 19894 14.6%

4 Honda 4100 3.0%

5 Toyota 1930 1.4%

6 Nissan 1407 1.0%

7 Mercedes Benz 1160 0.9%

8 BMW 672 0.5%

9 Volvo 422 0.3%

10 Peugeot 350 0.3%

Total Passenger Car 136451 100%

1.3 The Proton Story

In 1983, the Malaysian government formed Proton (Perusahaan Otomobil Nasional) – a 70/30 joint venture between the Malaysian government and Mitsubishi. Assembly of its first national car, the Proton SAGA, began in 1985. The SAGA contained 70 percent local content in the beginning, with plans to increase this eventually to 90-95 percent. Currently the Proton is between 60 and 62 percent local content according to GSP criteria.

Product Launch

1985 Proton SAGA 1.3 and 1.5 litre

1992 Proton ISWARA 1.3 and 1.5 litre

1993 Proton WIRA 1.5 and 1.6 litre

1994 Proton SATRIA 1.3 and 1.6 litre

1995 Proton PERDANA 2.0 litre

Proton WIRA 1.3, 1.8 litre and

2.0 diesel ( new generation )

1996 Proton TIARA 1.1 litre

1997 Proton PUTRA 1.8 DOHC

1998 Proton SATRIA GTi 16V

Proton PERDANA V6

1.4 EON ( Proton Leading Car Distributor )

EON, a member of the DRB-Hicom Group, was established on 16 May 1984 as the sole distributor of

Proton cars. On 1 September 1985, it marketed the first Proton Saga, and thenceforth there was no looking back. As the leading distributor for Proton cars in Malaysia, it has also became one of the nation’s fastest emerging group. Sales volume increased rapidly – from 7,494 units in 1985 to 140,968 units in 1997, averaging an annual growth rate of 18.7 per cent. For the financial year ended 31st December 1998, the group recorded a turnover of RM 3.95 billion with a pretax profit of RM 101.6 million.

2.0 CHANGES IN THE CAR INDUSTRY

In Malaysia, for the last 10 years, the car industry was practically taken over by Proton brand. Of the vehicles sold annually, 70 percent are Proton sales. Some 25 other manufacturers compete for the remaining 30 percent. The previous best selling car like Nissan Sunny was totally wipe out almost overnight since Proton huge takeover in market sales more than 10 years ago. Over the next decade, the Malaysian Proton vehicle market is expected to increase close to 90 percent from 230,000 units at present to approximately 375,000 units in the year 2000.

3.0 HOW PROTON REMAIN NO.1

3.1 Marketing-Mix Strategies

The most basic marketing-mix tool as in Product, Proton offers unquestionably the best warranty package of any manufacturer. The most important part being the power train warranty, which guarantees the engine and transmission assemblies against failure for six years.

The next most aggressive marketing-mix tool in Proton sales is Promotion and Place. Proton through EON as distributor has been able to undertake to communicate effectively and promotes its product to the target market. It has set up communication and promotion programs extensively consisting of advertising, sales promotion, public relations, and direct and online marketing.

The very first promotion Proton used was to organized the car naming contest, and it was from here that a certain brand belonging patriotism towards Proton SAGA name was instill among Malaysian. The government itself also relentlessly pursue the promotion of Proton car on a nation wide scale with the Prime Minister launching almost every new model category in the Proton car lineage. This itself has been widely covered in all major newspaper for the benefit of market brand awareness.

As in recently the Prime Minister as a prime mover in promoting Proton cars have launched numerous world events namely, the World Cup Golf ‘99, and Le Tour De Langkawi, awarding a Proton car to its winner. The recent achievement of Malaysian athletes who had set and broken records in Kuala Lumpur 98XVI Commonwealth Games was also not forgotten, as the athletes were each awarded a Proton PERDANA.

Besides this Proton through its marketing arm EON, have also been spo

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