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Malaysia Car Industry Essay

2585 words - 10 pages

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...

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