The Malayan car market is dominated by Malaysia ‘s national auto Proton, Toyota and Perodua which in 2008 and 2009 accounted for 76.6 % of the vehicles sold yearly. In the past 2 old ages the statistics shows that 32.2 % of Perodua, 28.6 % of proton and 15.8 % of Toyota was sold. Thus it can be concluded that they are ruling auto houses in Malaysia. These houses have sensible monetary values, hence low-cost by pupils, non workers and workers. Besides it is cheaper to serve these three autos compared to other autos like BMW, Mercedes Benz, and Ford and so forth. In add-on is easy to happen the parts of these autos in Malaysia that is why people prefer to purchase them 15

GOVERNMENT REGULATIONS 16

CRISIS FACED BY THE INDUSTRY 17

Decision 18

Mentions 19

History

Car INDUSTRY IN MALAYSIA

Malaysia is one of the smaller Southeasterly Asiatic markets for motor vehicle production and gross revenues and ranks behind South Korea, the People ‘s Republic of China, Taiwan, Thailand and Indonesia. Since 1985, when the first made-in-Malaysia auto, Proton rolled off the production line, it have been spearheading Malaysia ‘s ambitious program to go one of the universe ‘s most advanced industrial societies by the twelvemonth 2020. To day of the month over one million Protons have been sold in 51 states throughout the universe. By contrast, Malaysia ‘s motor vehicle industry really remains to a great extent protected with import responsibilities runing from 140 to 300 per centum on autos, and really high local content demands. Malaysia besides maintains an import prohibition on motor to pull clients. A menace identified is AFTA in the twelvemonth 2003. It is largely believed that 90 % of Proton purchasers choose Proton over the imports because of monetary value. Once you lift the duty as it will be in 2003, you will lose the hard currency flow from the duty and besides free enormous market portion for the Proton. Therefore, the auto market industry which has been monopolized by Proton will surely alter in the following old ages to come.

Export of Cars

Malaysia ‘s autos are presently exported T over 50 states in Europe, Asia and South America including Australia, Turkey, Russia, India, Laos, Egypt and Argentina. Malaysia ‘s houses export of autos started in 1986 and amounted 25 units which were exported to Bangladesh. In 1987 the export markets expended to Brunei, Malta, New Zealand and Sri-Lanka. The figure of units exported in 1987 totaled 443 units. First exports of proton in Europe started in 1988 when it exported 540 units of Proton Saga to the Republic of Ireland. A twelvemonth subsequently, in 1989 proton started exporting its autos to UK, Singapore and Jamaica. Gross saless to UK and Ireland totaled 10 500 units during this twelvemonth and since so the UK is the largest export market of Proton. Proton ‘s distribution in the UK is handled by its subordinate, Proton Cars ( UK ) Ltd. UK export market significantly contributed to the betterment of proton ‘s sale from merely 25 units in 1986 to 20,269 units in 1993, from these 20 269 units entire exports to the UK and Ireland amounted to 17 440 ( 86 % ) units. But Malaysia ‘s entire exports of Proton fell below 15 000 units in 1994 following a crisis between the Malaysian and the UK authoritiess over the Pergau dike and certain defence that twelvemonth exports of Proton to UK fell to 10 169 units ( about 68 % of Malaysia ‘s entire exports ) and since so and up to 1995-97 Proton ‘s exports to UK and Ireland accounted to 10 000 units. But the gross revenues volume dropped to 7 000 units per twelvemonth during the 1998-99 when proton exported less to the UK in order to minimise the lower borders of its gross revenues to the state. In UK Proton is eligible for revenue enhancement interruptions under the EU generalized system of penchant but it has still to come in into such auto markets as Germany, the US and Japan.

Malaysia: Export OF Cars

( wholly built up ) ( CBU ) ( new )

Unit of measurements

RM m ( FOB )

1994

14,813

314.9

1995

20,718

412.4

1996

22,572

469.1

1997

25,900

532.1

1998

21,771

535.6

1999

18,117

492.5

The above tabular array shows increasing tendency in exports since 1994 up to 1997, lifting from 14,813 units to 25,900 units. However, in 1998, a twelvemonth when the economic system was down in recession export of autos significantly dropped and this tendency continued in 1999.

Import of Cars

Imports of autos, which were on a high tendency during 1995-97, fell in 1998 due to the economic lag that caused the low income in the state. During this twelvemonth, imports of autos wholly knocked down ( CKD ) , which normally make up more than 95 % of the entire import value of autos in the state fell to 145 217 units stand foring a diminution of 60 % from 1997 ‘s entire of 363 201 units. As for the autos wholly build-up ( CBU ) , their imports slowed down to 1 352 ( comparing to 5 649 in 1996 ) due to the mentioned economic crisis but significantly increased to 5 470 units due to the economic recovery. . Imports of CBU and CKD autos together constituted about 85 % of the entire imports of motor vehicles in the state.

Exchange rate policy

On September 1, 1998, as portion of a broader attempt to reflate the economic system and stabilise the currency, the authorities took drastic action by repairing the exchange rate of the ringgit to the U.S. Dollar at RM 3.8/US $ 1 and establishing selective capital controls. Malaysia ‘s chief aims in establishing the controls are to extinguish offshore trading in the ringgit and insulate the domestic economic system from external hazards posed by short term capital flows. The exchange controls cut down the ability of non-residents to prosecute in ringgit minutess, require colony of imports and exports in foreign currencies, deter short-run capital influxs by necessitating them to stay in the state for at least one twelvemonth, curtail Malayan investing overseas, and limit the sum of foreign currency persons and corporations can take out of the state. The authorities has stressed that the steps maintain general convertibility of current history minutess, and do non impair repatriation of involvement, net incomes, dividends and committees on investings. The authorities has besides stated that the controls are impermanent and will be lifted one time the international fiscal substructure addresses destabilizing capital flows which the authorities blames in big portion for recent economic troubles.

Malaysia: Import OF Cars

Unit of measurements

RM m ( CIF )

Autos wholly knocked down ( CKD )

1994

1995

1996

1997

1998

1999

181,052

262,125

290,268

363,201

145,217

263,696

1,934.0

3,043.0

2,795.0

2,795.3

1,173.8

2,244.4

Autos wholly built-up ( CBU )

1994

1995

1996

1997

1998

1999

2,079

2,461

5,649

3,551

1,352

5,470

54.2

87.5

196.2

120.6

93.5

146.8

PRODUCTS AND SERVICES

Car industry Malaysia is a flourishing industry which has been developing quickly over the old ages it comprises countries of activities from auto fabrication to covering car concern with foreign states. Auto industry Malaysia is one of the chief manufacturers and exporters of vehicle parts, constituents and accoutrements which are widely accepted to most of taking states of the universe. Foreign states like Japan, United Kingdom, Thailand, Taiwan, Singapore, and Indonesia are major importers of Malayan autos

A big figure of autos are produced to run into the turning demand of consumers ; this is one of the Governments efforts to reconstitute the automotive industry. Prognosiss show an expected addition in gross revenues in the close hereafter after researches showed an overall growing of 13.8 % during the twelvemonth 2007.

The top car manufacturers in Malaysia are Perodua, Perusahaan Otombil Nasional Bhd, and the first auto undertaking was PROTON. Measures have been adopted in effort to run into demands of clients by supplying dependable and competitory car constituents and accoutrements.

PROTON was the base of Malayan car industry, of all time since 1985, there has been a big figure of vehicle production for a market of more than 500 000 consumers and largely manufactured locally.

CHARACTERISTICS OF PRODUCTS/SERVICES

NORMAL Good:

This is an industry of normal goods, autos. This is because as the income of the population goes up, intending a growing in the economic system their demand goes up. On the other side the opposite happens. For illustration: Vehicle gross revenues were up by 11 per centum in 1997 to a record 405,000 units. The economic crisis dramatically wedged vehicle gross revenues in Malaysia for 1998, with vehicle gross revenues dropping by 60 per centum, to 164,000. Hence this proves that autos are a normal good. Their demand goes up with the addition in demand and frailty versa.

Utility GOODS:

These are good that can be used alternatively of autos to execute the same map as a manner of conveyance. These include bikes, trains and even bikes.

PRICE ELASTICITY OF Demand:

The monetary value snap of demand in this industry can be said to be elastic. Let ‘s take a look income in this instance doing the monetary value snap of demand to be elastic.

Income

The bigger the proportion of income spent on a good the higher the snap of demand. As for autos people spend 1000s and even 1000000s purchasing autos which are a really large proportion of their income. So as hire purchase involvement go up, auto purchasers will hold to pay more monthly installments. Even Bankss increase their involvement rates on loans for autos

Example: A free-lance auto salesman identified merely as Teo said a purchaser taking a RM42, 000 loan would hold to pay about RM54, 000 over seven old ages – about RM4, 000 more compared to the RM50, 000 paid when the involvement rate was 2.7 % .

AVAILABILTIY OF CLOSE SUBSTITUTE: Looking at this industry there are less substitutes goods. This means that the monetary value snap of demand in relation to handiness of close replacements is less elastic.

EXAMPLE OF A SUSTITUTE GOOD: PERODUA MONO TRACER 130HP CABIN MOTORCYCLE

FIRMS AVAILABLE IN THE MARKET

Malaysia has 10 piecing companies and produce 18 commercial autos. The assembly companies are:

Swedish motor assembly programs ( Volvo auto corporation ) which is located in Shah Alant, Selangor which specializes in Volvo trade names

Inokom Corporation ( Shime Darby group ) which is in Kulim Kedah and produces auto trade name for BMW, Jinbei and land wanderer

Naza Automotive Manufacturing ( Nan group ) produces Kia, Naza and Peugeot

Assemble Service ( UMW- Toyota groups ) located in Shah Alam, Selangor which produces Toyota trade name.

Honda Malaysia ( Honda motors ) located in Pegoh Melaka which produces Honda trade name

Predua located in Seiendah, Selangor which produces Perodua and Toyota trade names

Tun Chong Motors Assemblers ( Tun chong motors groups ) which produces Nissan and Renault and has two piecing location, the first 1 is located in Segamba Kuala Lumpur and the 2nd one in Serundah Selangor

Isuzu-Hicom Malaysia ( Isuzu motors ) which assembles Isuzu trade name and is located Pekan, Pahang

Automotive Industries Malaysia ( DRB-Hicom group ) located in Pekan, Pekan, Pahang which assembles Mercedes, Suzuki and SSANGYONG trade names

Oriental Assemblers ( oriental groups ) located in Tampoi Johor which assembles Hyundai and Chana trade names.

SIZES OF THE FIRMS

A house ‘s size can be determined by many factors, but in this instance we are merely traveling to cover with a few that is listed below.

Workplace/ employees: a work topographic point can be defined as a topographic point where people work. Therefore in this instance we are chiefly traveling to concentrate on the figure of employees/ staff that a company has.

Production capacity: is by and large the volume of merchandises that can be generated or manufactures by a production works ( company ) in a given period by utilizing current resources.

Gross: gross is defined as an Amount generated from sale of goods or services, or any other usage of capital or assets, associated with the chief operations of house before any costs or disbursals are deducted.

Overseas: here we are traveling to be discoursing the states that the companies ‘ export their merchandises ( in this instance auto ) to.

Now we are traveling to look at the above mentioned factors in some of the well known or top bestselling auto companies in Malaya

PERODUA: ( the 1st/leading company in Malaysia )

Work force: – the entire figure of Perodua ‘s staff was said to be 10,000 on June 2009.

Production capacity: -The works presently has the capacity to bring forth 250,000 units per annum on 2-shift rhythm.

Gross saless and service web: – To day of the month, PSSB has 41 gross revenues subdivisions and 139 gross revenues traders countrywide to function its clients expeditiously. It besides has 46 service subdivisions and 117 service mercantile establishments throughout Malaysia for clients ‘ convenience.

Overseas: – Perodua produces its autos to states including UK, Singapore, Brunei, Fiji, Nepal and Sri Lanka.

Proton:

Work force: – Proton late has approximately 10,300 employees

Production capacity: – In 2006, Proton ‘s gross revenues dropped by 30.4 % from 166,118 in 2005 to 115,538 for the Malayan market, with a ulterior study bespeaking a 55 % autumn of gross revenues to 962.3 million ringgit, its lowest in at least seven old ages

Overseas: – Proton exports autos to the United Kingdom, South Africa, and Australia and the company is sharply marketing its autos in several other states including the Middle East. Besides that, Proton has besides been exporting a little volume of autos to Singapore, Brunei, Indonesia, Thailand, Nepal, Sri Lanka, Pakistan, Bangladesh, Taiwan, Cyprus and Mauritius. 14,706 Proton autos were exported in 2006

Gross: – in 2008 it was reported that Proton ‘s gross was RM 6.49billion

MERCEDES BENZ

Work force: – Proton late has approximately 10,300 employees

Production capacity: – The retail web of Mercedes-Benz Malaysia is represented by 59 authorised traders for the Mercedes-Benz, smart and Mitsubishi Fuso trade names. A sum of 90 mercantile establishments provides gross revenues and after gross revenues services nationally.

Overseas: – unluckily we could n’t happen any list states, but it ‘s said to be exporting its autos to 17 states.

Gross: – EUR 99.4 billion ( 2007 fiscal twelvemonth ) which is about RM4, 114,474,205,465.9

Dominant Firms

The Malayan car market is dominated by Malaysia ‘s national auto Proton, Toyota and Perodua which in 2008 and 2009 accounted for 76.6 % of the vehicles sold yearly. In the past 2 old ages the statistics shows that 32.2 % of Perodua, 28.6 % of proton and 15.8 % of Toyota was sold. Thus it can be concluded that they are ruling auto houses in Malaysia. These houses have sensible monetary values, hence low-cost by pupils, non workers and workers. Besides it is cheaper to serve these three autos compared to other autos like BMW, Mercedes Benz, and Ford and so forth. In add-on is easy to happen the parts of these autos in Malaysia that is why people prefer to purchase them

GOVERNMENT REGULATIONS

The Malayan authorities to a great extent influences the activities of the domestic automotive manufacturers/assemblers, by enforcing high duties and trade barriers which in return minimizes the figure of auto parts being imported. For illustration the Ministry of International trade and Industry overseas a system of sanctioned licenses that doubles up as a quota by curtailing the entire figure of cars that can be imported in a given twelvemonth in relation to the size of the domestic market content.

CRISIS FACED BY THE INDUSTRY

One of the major crises that affected this industry was the extended addition in the monetary values of automotive fuels in relation to the energy crisis in the old ages 2003-2008.this demoralized purchases of athletics public-service corporation vehicles ( SUVs ) and pickup trucks with low fuel economic system.

In add-on the automotive industry was hit by a planetary fiscal downward spiral of 2008-2010.

Decision

As this industry has been making really good in the past, we believe it will go on to execute good in the hereafter. We have noticed we are go forthing in dynamic times and more advanced engineering is being invented about every twelvemonth these new engineerings might assist in the new and improved theoretical accounts of the already ascendant houses. Besides, with the authorities enforcing barriers to entry of the imported parts, this will give the domestic houses the alteration to out show themselves and better their goods where possible. On top of that it will help in bettering competition between locals, therefore assisting in the motive of these houses, for better consequences. At the terminal of the twenty-four hours this will take to an addition in the state ‘s ( Malaysia ) Gross Domestic Product every bit good as Gross National Product ( GDP/GNP ) .