Malaysia is the only country to have independent brand passenger cars and the second largest automobile market in Southeast Asian. The government implements a series of favourable policies to support the birth and development of auto companies. It along the way seems as so smooth, but also as the hothouse flowers and lack of the capability of fighting. Malaysia is ASEAN’s largest passenger car market but also a gateway into ASEAN and a springboard for other countries.
Many entrepreneurs of world car have valued it and the automotive market in Malaysia has become a “battleground”. Toyota, Honda, Nissan, Kia, Hyundai, Mercedes-Benz of Germany, BMW, Volvo and other world-renowned automobile manufacturers have already entered the market in Malaysia. Proton is a household name and the pride of Malaysia. The prime minister of Malaysia, Dr. Mahathir Mohammad began to develop the national automotive industry in a voice of opposition at the early 80s of 20th century .
The Malaysian National Automotive Industry Corporation – car company Proton was born in the year of 1983. “Proton” is the name gave by prime minister and Proton is using the Malaysia’s emblem as a car standard. The technical level has been improved after the Proton cooperation with Mitsubishi. Proton did not reliance too much on Mitsubishi from the beginning of cooperation and it has always insisted on independence and self-development. In 1996, Proton acquired 80% shares of the famous British sports car manufacturer Lotus .
Thus, the technology, research and development improved rapidly. Since then, the Proton has acquired the Detroit automotives design centre to meet the different needs of domestic and international market companies. It has developed independently from the car production and sales capacity. In addition, Proton continues to expand the investment, which is the establishment of the first Motor City in Southeast Asia. Besides that, the successful of Proton make that the government of Malaysia build a second state-owned auto companies, Perodua in October 1992.
The Company mainly produces 0. 8 to 1. 3 litre cars. Recent years, Malaysia has made a great development of cars but the domestic car is declined in the market because of the increasingly intense of the competitive environment. The government announced the new National Automotive Policy in 22, March 2006 to protect the domestic car market. Malaysia car market are shrinking year by year so that Proton has been looking abroad, it exported to the Middle East, Southeast Asia and now is targeting China. The lobal automotive trade is almost a ‘divided’ over the market and makes the changes to the sales trend for car market. The protagonist of this market is mainly from Japan, the United States and Europe. In this situation, Malaysia’s Proton exports in 1986. The export volume in 1993 increased to 20,226 and decrease 15,000 in 1994. The export performance of Malaysia’s automotive increase in steady trends in 1998. The 85%-90% sales of Proton and Perodua are in domestic market and only the 10% of the commercial vehicle exports.
The challenges to the car industry include the changes to the economic environment. The financial turmoil sweeping the world and substantially increase the cost. Thus, the own brand automobile advantage is weakened. The international oil prices and iron ore prices, which are soaring, made the global inflation. The political environment also is a challenge to the car industry. Malaysian government has adopted a gradual improvement measures to relax the restrictions on imported cars. It can affect the domestic cars to meet the regional and international competition.
In the past, prices of imported cars whether or reduced price, must be approved by the government, and now, import car dealers can be adjusted according to market demand, the prices of their own. Besides that, the social environment also became a challenge to the car industry. Malaysian has lost confidence in domestically produced car as the automotive technology behind the foreign auto industry and the quality inferior to many small problems. People willing to spend more to purchase the imported cars as the quality is better than domestic cars and there were more fashion.