...Marketing Strategies For Perodua Executive Summary This marketing report briefly analyses the marketing approach of Perusahaan Otomobil Nasional Kedua (PERODUA), in this analysis, the various marketing activities such as product development, distribution, pricing, advertising and market research of the company is critically evaluated. The report also evaluates the company's current position against the automotive industry and its competitors. A concise insight into the consumer's perception of the brand is also investigated. The contents contained herein is not exhaustive of the company's marketing and business activities but merely provides a basic overview of its current marketing standpoint, business challenges and possible remedies to its position based on information available on the public domain. Marketing is an organization function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationship in ways that benefit the organization and its stakeholders (Kotler et al.,2007). Marketing is a holistic process encompassing prior and after the act of selling applicable to any organization, large or small, for-profit or non-profit, domestic or global. Marketing itself is an evolutionary process starting off from consumer goods marketing all the way to electronic marketing of current times. Marketing professionals have also capitalized on viral marketing in recent times. This marketing report analyses the marketing...
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...the domestic auto market (Exhibit 1) and consequent dwindling profits and margins. Without taking into account the government’s R&D grant in 2007/2008, the company suffered three straight years of losses from 2007 to 2010. Its finances recovered a little in 2009/2010, thanks to the government’s “cash for clunkers” incentive programme, a MYR143 million (USD48 million)[2] R&D grant from the government, and some improvement in sales. However, its net profit margin barely reached 3% — very low by industry standards — and most of its performance measures lagged behind those of the industry leaders (Exhibits 2 and 3). The stock price of Proton’s listed parent, Proton Holdings Berhad (Proton Holdings Limited), had been substantially lower than its net asset value for several years (Exhibit 3). Because of its low market to book ratio and the heavy government subsidies paid to Proton, Mr. Syed Zainal was under tremendous pressure to turn around Proton’s performance. Adding further pressure, the changing institutional environment had exposed Proton’s inability to compete. Since 2005 when the government committed to reducing import tariffs under the ASEAN Free Trade Area (AFTA) agreement, the external institutional environment became very unfavourable to Proton. Although the government continued to protect Proton by providing grants and subsidies, Proton did not stop losing its market share to competitors, most notably to the second national car maker, Perodua. The competition in...
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...MARKET SUMMARY Proton is the Malaysian national automobile manufacturer (Malay acronym for Perusahaan OTOmobil Nasional, 'National Automobile Enterprise'), which was established in 1983 under the direction of the former Prime Minister, Dr. Mahathir Mohamad. Proton Holdings Berhad, the holding company, is listed on the Bursa Malaysia. Based on technology and parts from Mitsubishi Motors, production of the first model, the Proton Saga began in September 1985 at its first manufacturing plant in Shah Alam, Selangor. Initially the components of the car were entirely manufactured by Mitsubishi but slowly local parts were being used as technologies were transferred and skills were gained. The 100,000th Proton Saga was produced in January 1989. Until the end of the 1990s, the car's logo featured the crest from Malaysia's coat of arms, featuring a crescent and a fourteen-pointed star. The new Proton logo features a stylized tiger head. In 1993, a model called Proton Wira was introduced based on the Mitsubishi Lancer/Colt. More than 220,000 units were sold between 1996 and 1998. Proton Perdana, based on the Mitsubishi Galant/Eterna, was first produced in 1995, intended for higher end market. The Proton Waja (Proton Impian in UK), which launched early 2001, is the first car model designed internally by Proton. By 2002 Proton held a market share of over 60% in Malaysia, which was reduced to barely 30% by 2005 and is expected to reduce further in 2008 when AFTA mandates reduce import...
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...MARKET SUMMARY Proton is the Malaysian national automobile manufacturer (Malay acronym for Perusahaan OTOmobil Nasional, 'National Automobile Enterprise'), which was established in 1983 under the direction of the former Prime Minister, Dr. Mahathir Mohamad. Proton Holdings Berhad, the holding company, is listed on the Bursa Malaysia. Based on technology and parts from Mitsubishi Motors, production of the first model, the Proton Saga began in September 1985 at its first manufacturing plant in Shah Alam, Selangor. Initially the components of the car were entirely manufactured by Mitsubishi but slowly local parts were being used as technologies were transferred and skills were gained. The 100,000th Proton Saga was produced in January 1989. Until the end of the 1990s, the car's logo featured the crest from Malaysia's coat of arms, featuring a crescent and a fourteen-pointed star. The new Proton logo features a stylized tiger head. In 1993, a model called Proton Wira was introduced based on the Mitsubishi Lancer/Colt. More than 220,000 units were sold between 1996 and 1998. Proton Perdana, based on the Mitsubishi Galant/Eterna, was first produced in 1995, intended for higher end market. The Proton Waja (Proton Impian in UK), which launched early 2001, is the first car model designed internally by Proton. By 2002 Proton held a market share of over 60% in Malaysia, which was reduced to barely 30% by 2005 and is expected to reduce further in 2008 when AFTA mandates reduce import...
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...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 Malaysia government but only have 35 manufacturers in operation at the year of 2012. In addition, almost 18 main well known car manufacturer in Malaysia market there are Proton and Perodua subsidise the most sales in the market and followed by Toyota, Honda and Nissan. Risk of Entry by Potential Competitors. In a country that is well developed such as Malaysia, we have competition from public transport companies. These include the KTM and several bus companies such as City Liner. When we look at risk of entry, it should be clear that a high risk of entry by potential competitors’ leads to an alteration of the profitability of the existing companies in the industry, simply because the more companies that enter, the smaller the market share of established companies. There are four main barriers to entry including, economies of scale, brand loyalty, absolute cost advantages and government regulation. In Malaysian automotive industry, we shall take a look at each factor separately. There is no doubt that Proton’s...
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...Malaysian automotive industry AFTA and Malaysian car industries Proton and Perodua are really going to feel the threat of AFTA if they are not prepared by the year 2005. Government has helped them by deferring the AFTA from 2003 to 2005. So now it is up to the local manufacturers to come out with their own remedies to face AFTA. The truth fact is that nobody can escape from liberalization of car industry in this region. From my opinion, Proton has already started preparing for AFTA. But is it enough? Sales have been projected to drop significantly for Proton once AFTA is implemented. One of the measures taken by Proton is in R & D sector. They have come up with first Malaysian design car. This is a milestone in Proton, which was realized using latest technology like Rapid Prototyping and commitment by the employees. Proton is also doing research and development with Lotus engineering and Petronas-Sauber Formula 1 team to come up with own engine. This moves in R &D sector is very important for them. Now they can show their own identity to the world rather than copying prototype of Mitsubishi cars. They have changed to a new logo that will give them more precise identity. Perodua still lack in this field, they still come out with Daihatsu prototype cars to manufacture in Malaysia. Local manufacturers have to come with their own identity or brand if they want to penetrate the ASEAN market. In order to have own identity, they need to come out with their own model that...
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...Chairman) Products Car, Automotive Parts Employees 12,000 Subsidiaries Lotus Cars Website www.proton.com Proton Holdings Berhad (stylized PROTON) is a Malaysian automobile manufacturer. It is headquartered in Shah Alam, Selangor and operates an additional manufacturing plant in Tanjung Malim, Perak. The company was established in 1983 as the sole national car company until the advent of Perodua in 1993. Proton is a Malay acronym for Perusahaan Otomobil Nasional Sendirian Berhad. (English: National Automobile Company Private Limited). Proton was largely a manufacturer of badge engineered vehicles from Mitsubishi Motors between 1985 and the early 2000s. The company has since produced several indigenously designed models and operates in at least 26 countries today, of which the majority are in Asia. Proton was formerly owned by Khazanah Nasional, the investment holding arm of the government of Malaysia. In January 2012, it was taken over by DRB-HICOM, a Malaysian conglomerate in a transaction amounting RM1.2 billion. Proton, predominantly reliant on its domestic market is currently undergoing structural and internal changes, as evident in the appointment of a new owner, partner, Chairman and the launch of various new and upcoming models in an effort to gain an international presence and increase profitability. Contents 1 History 1.1 1980s 1.2 1990s 1.3 2000s 1.4 2010s 2 Vehicle line-up 3 Logo and branding ...
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...It is headquartered in Shah Alam, Selangor and operates an additional manufacturing plant in Tanjung Malim, Perak. The company was established in 1983 as the sole national car company until the advent of Perodua in 1993. Proton is a Malay acronym for Perusahaan Otomobil Nasional Sendirian Berhad. (National Automobile Company Private Limited). approved by the Cabinet in 1982, leading to the official founding of Proton on 7 May 1983. The company was initially wholly owned by the government of Malaysia through Khazanah Nasional and was headed by its founder, Dr. Mahathir. Proton approached Mitsubishi Motors between 1983 and 1984 and brokered a joint venture between both companies for the production of the first Malaysian car. The result of the collaboration was the Proton Saga, which launched on 9 July 1985.[3] It was based on the second generation 1983 Mitsubishi Lancer Fiore 4-door saloon and powered by a 1.3-litre Mitsubishi Orion 4G13 engine. The first Proton Saga to roll off the production line in Shah Alam is preserved in the Muzium Negara as a symbol of the beginning of the Malaysian automotive industry. Sales of the new Saga outstripped supply and Proton struggled to meet the growing demand, but by mid-1986 it had captured a 64% majority domestic market share in the Below 1600cc segment.[4] Later in October 1987, a hatchback variant called the Proton Saga Aeroback was launched and featured a more powerful 1.5L Mitsubishi 4G15 engine and a redesigned rear-end...
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...INSTITUTE OF DEVELOPING ECONOMIES IDE Discussion Papers are preliminary materials circulated to stimulate discussions and critical comments IDE DISCUSSION PAPER No. 120 A Flowchart Approach to Malaysia’s Automobile Industry Cluster Policy Akifumi KUCHIKI* September 2007 Abstract In this paper, we apply a flowchart approach to investigate Malaysia’s automobile cluster policy. We investigate whether the industrial cluster policy has been successful or not, suggest policy prescriptions, and propose a way to prioritize policy measures. Our flowchart approach leads to the following three policy prescriptions: (1) Malaysian firms should establish sites for exporting compact cars with automatic transmissions; (2) actors in the public, semi-public and private sector should work to upgrade skilled labor; and (3) the central government should promote liberalization and deregulation to attract foreign firms into the supporting industries. Keywords: Malaysia, automobile industry cluster, policy prescriptions, actors, deregulation JEL classification: G18, O18, R11 * Executive Vice President, Japan External Trade Organization (JETRO) E-mail: akifumi_kuchiki@ide.go.jp The Institute of Developing Economies (IDE) is a semigovernmental, nonpartisan, nonprofit research institute, founded in 1958. The Institute merged with the Japan External Trade Organization (JETRO) on July 1, 1998. The Institute conducts basic and comprehensive studies on economic and related affairs in all...
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...OVERVIEW Proton Holdings Berhad (PROTON) is a Malaysian automobile manufacturer. It is headquartered in Shah Alam, Selangor and operates an additional manufacturing plant in Tanjung Malim, Perak. The company was established in 1983 as the sole national car company following the wishes of former Prime Minister Tun Mahathir Mohammad until the advent of Perodua in 1993. Proton is a Malay acronym for Perusahaan Otomobil Nasional Sendirian Berhad. (National Automobile Company Private Limited). At first, parts and technology came from Mitsubishi but later on, as experience accumulated, Proton became independent even if most of the cars were still based on Mitsubishi models. Their first model which was launched in 1985 was called the Proton Saga. Soon after the first Sagas were rolling on Malaysian streets, exports started to Bangladesh (1986) and by 1987 Proton had already made 50,000 units. That same year a distribution agreement with a UK dealer was made in order to ship Sagas over to the British Isles but that would materialize only in 1989, when 150,000 units were already produced and plans for engine assembly plant were already under way, the inauguration being celebrated in 1991. A new model, the Proton Iswara was launched in 1992 and then in 1993 the Wira, a model based on the Mitsubishi Colt, which enjoyed moderate success with 220,000 units sold over 2 years. In 1994, the Proton Satria joined the model line-up and in 1996 the Proton Tiara. With thousands of models sold...
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...International Political Economy Contents 1.0 Explanation of: 3 1.1 Free Market System 3 1.2 Command System 3 1.2 Mixed Economy System 4 1.4 Islamic Economic System 5 2.0 Introduction 6 3.0 Description of the Malaysian Economic System 7 4.0 What caused the failure of the Free Market System in Malaysia 10 5.0 How does the Government intervene? 11 Reference 13 1.0 Explanation of: 1.1 Free Market System Free market system is an economy where the question is answered by and controlled by the people. It is a market based economy that depends on the law of supply and demand. The values of properties and facilities are set by the participants in the market i.e. suppliers, vendors, businesses, and consumers, in which the government has no role in setting any rules or regulations of prices and resources. In other words, the government does not interfere. It can be often referred to as Barter Trading. Both parties voluntarily agree to exchange something for the other to which he holds value. Which goods are to be produced are defined by the demand and supply rule. In a free market the products chosen by the consumers survive, a deficiency happens at time when consumers need to obtaining more than manufacturers produce. A surplus happens while creators want to sell more than customers wish to buy. Unavailability of a manufactured goods commonly result in value growths in a market economy; surpluses typically consequence in cost reductions. The disadvantages...
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...Nasimuddin and SM Nasarudin SM Nasimuddin – and is one of the largest importers of used-luxury vehicles in Malaysia. The group has also evolved into a major importer and distributor of global automotive brands such as Ferrari, Maserati, Brabus, Peugeot, Kia, Chevrolet and Citroen. Aside from these brands, the Naza Group owns dealerships for Mercedes-Benz and Perodua. Besides importation and distribution, the Naza Group manufactures Kia and Peugeot vehicles at its RM500 million plant in Gurun, Kedah. The vehicles produced at this plant are for both the Malaysian and overseas markets. Apart from the automotive business, the Naza Group is also one of the largest distributors for motorcycles in Malaysia. The group is currently the sole importer and distributor for Ducati, Harley-Davidson, Piaggio, Vespa, Aprilia and Gilera. It also imports used-luxury bikes and manufactures scooters and bikes under the Naza brand at its RM30 million motorcycle manufacturing plant in Shah Alam, Selangor. Outside the automotive and two-wheeled motor vehicle industries, the Naza Group is an established player in the property development market through its subsidiary, Naza TTDI, which is best-known for the development of the acclaimed township of Taman Tun Dr Ismail in Kuala Lumpur. To-date, Naza TTDI has completed over 14,000 residential and commercial units and is currently developing the...
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...CORPORATE SOCIAL RESPONSIBILITY SUMMARY REPORT 2010 1 2 UMW HOLDINGS BERHAD CORPORATE SOCIAL RESPONSIBILITY SUMMARY REPORT 2010 3 CONTENT 02 04 - 05 06 - 07 08 09 - 11 12 - 14 15 - 18 19 - 21 22 - 23 24 - 26 27 - 31 32 RATIONALE PRESIDENT'S STATEMENT UMW STRUCTURE OUR ECONOMIC FOOTPRINT AWARDS RECEIVED WORKPLACE MARKETPLACE ENVIRONMENT COMMUNITY PERFORMANCE DATA PROFILE DISCLOSURE FEEDBACK AND COMMENTS ABOUT THIS REPORT UMW’s Corporate Social Responsibility Report supplements our other publications, including the Group Annual Report, our internal staff magazine “U”, regular media releases and investor updates, as well as our Group and divisional websites. This report is also a follow-up to the Group’s maiden CSR report, launched in 2008. The report brings together the Group’s economic, social and environmental performance from 2007 to 2009. We have also included some information for 2010 which was available before the collection deadline. The report covers the entire UMW Group, and those subsidiaries that are included in Group consolidated financial statements. In the Environment section of this report, we have particularly concentrated on our Automotive Division, as it is the Group’s largest profit contributor and accounts for around 60% of our physical assets and 70% of our workforce. We have also included relevant environmental data from our other divisions, to provide a more complete picture of the Group’s environmental initiatives and performance. "Corporate Responsibility...
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...Introduction This report focuses on Malaysia. Some of the key issues that I would like to highlight in this forum are: the influence of globalization on International Business Trade for Malaysia, the roles of ASEAN Free Trade Agreement (AFTA) policies for ASEAN trade collaboration and competition, the macro environmental factors that international business should focus upon before launching market expansion, the roles of government in supporting international trade such as Foreign Direct Investment, how government should assist their businesses in competing in global arena either by protectionism or subsidizing, why has International Franchising strategy has work and what are the industries that have utilized this strategy for expansion successfully and why international business executive should pay attention to cultural influence in business negotiation process particularly Malaysia. Influence of globalization Globalization is taking significant role in many nations around the world. All products and services are strongly linked to each other. For example, different parts of computer can be manufacture in different location and assemble in China to save cost. Both developed and developing countries such as Malaysia are cautious of its benefits not only socioeconomically but also geopolitically. Realizing this, Malaysia has started to take initiative in globalization approach in the 21st century. For example, the export of Thai rice and sugar to Malaysia, telecommunication...
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...ECONOMIC BACKGROUND OF MALAYSIA Malaysia is a small and open state-oriented and newly industrialized market economy. The code for the Malaysia currency is MYR. The currency of Malaysia is Ringgit Malaysia (RM) and is unofficially identified as the Malaysian dollar. Ringgit comes into notes and coins. A Ringgit can be divided into 100 cents. The currency is denominated into RM1, RM2, RM5, RM10, RM50 and RM100 while the Ringgit is denominate into 5 cents, 10 cents, 20 cents and 50 cents. The currency of Malaysia is currently pegged at RM3.80 to US$1.00. Malaysia centre bank is Bank Negara Malaysia. Malaysia main trading partner is U.S, Japan and Singapore. Through the background economic of Malaysia, the largest deposits of tin in the 1840s led to Malaysia is being responsible for nearly half of the world’s tin output. Started in the early 20th century, the booming of the country’s agricultural sector is being seen that the rubber is replacing tin as Malaysia main export product. Today, Malaysia is one of the largest exporters of semiconductors and electronic goods. The factories devote about 30% Malaysia’s total manufacturing sector output and there are 40 semiconductor companies operating in Malaysia. By the time, the International multi-national companies have set up assembly and testing units in Malaysia. The important reserves of oil and gas are founded. The oil production occurs near Peninsular Malaysia as well as the regions of Sabah in east Malaysia ad Sarawak....
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