Essay on Automotive Industry in Malaysia

2750 Words Nov 21st, 2014 11 Pages
Overview of the Automotive Industry
Malaysia automotive industry established on early 1960s. In the early 1960s, the development of automotive industry had become the attention from Malaysian government to build up the industrial base, at the same time to decrease dependency on the agricultural sector. Nowadays, automotive industry had become one of main income for Malaysia. The large demands from the resident of Malaysia make the automotive industry develop smoothly and rapidly, and well known as the biggest automotive customer market in South –East Asia. From the MAA 2012 report the total average sales of commercial car are 52,300 units every month (Kenanga research, 2013). There are 77 issues about manufacturing licenses by the
…show more content…
Also, the industry spends a lot of their profits in advertising and marketing their cars. This is a huge advantage as the new companies cannot afford these fixed costs relating to advertisement throughout the country (Hill, Jones, 2009).
Furthermore, as we take a brand loyalty of the companies in the industry, the existing firms can build a very strong brand recognition using advertising of its brand name and overall company. It is not a shock to find out that the sales of Proton cars increased by 11.5% just in the year of 2000 (New Strait Times, 2001). Companies in the automotive industry constantly invest in Research and Development programs to emphasis on high quality cars and in this case, a more fuel efficient and environmentally friendly vehicle i.e Toyota managed to combine petrol engine power and an electric motor to produce the world’s number one hybrid car (Toyota, 2013).
In this industry, heavy machinery and high labour is involved in the production of the vehicles. When it comes to an established firm such as Proton, it has already gained a global reputation due to alliance with Lotus. Proton is provided with supplies in technological aspects and in the research and development department (Proton Cars South Africa, 2013). The new firms will not only have to find the required inputs of labour and equipment, skills and materials, but also to find the initial capital is very difficult for them. According to Stock-Analysis-on-Net 2013, Honda has a

Related Documents