Competitive Automobile Industry and the Client’s Requirements

Topics: Automotive industry, Volkswagen Group, Innovation Pages: 5 (1334 words) Published: May 16, 2013
Competitive automobile industry and the client’s requirements

The automotive companies need to implement, and maintain high standards of Total Quality Management practices to match up to the competitive automobile industry and the client’s requirements, this has been considered as infrastructural strategy in the operations management research fields.

Due to the competition, the clients demand for quality, hence making it one of the biggest factors of consideration for company’s survival in the always expanding global market, quality is then important in the future economic benefits of any company. This strategy has been applied by many worlds’ leading automobile manufacturers to gain competitive advantage over their business rivals.

In Malaysia, since the inception of the ASEAN Free Trade Area in 2005, there has been impact in their car manufacturing industry, prior to this agreement; the car industry was protected by the central government through such systems as refunds schemes, tariffs and investment controls giving the local companies a competitive advantage over the other over- seas rivals. According to Thomas (2010), this has been observed by critics to be a positive move in driving the regional assembly and manufacturing integration and cost competitiveness in the larger ASEAN countries. By 2010 Malaysia car industry was far behind the Thailand’s.

The government adopted policies to develop local automotive industry and encourage vehicles to be assembled locally: These include manufacturing vehicle parts locally imposing imports taxes and attracting a tariff system on imports. Another was that, all the dealers and distributors to get import licenses that had to be re-newed in every six months, (Song Y, et al) Though others companies assembled other brands of automobiles, there was an upward surge in the production of many makes and models, leading to lower prices of some parts, hence a challenge to the manufacturers to achieve their economies of scale. Imports were very high due to the inputs in the assembly of plants, this leads to lower technology transfer and human resources development in automotive industry, (Gupta, & Srikanth, 2004).

The next move was the launch of the National car project, the PROTON in 1984 increasing the levels of technology and development of local property rights. It was a joint venture between Mitsubishi Motors of Japan, by 1985 PROTON Saga was in production, and it was given preferential tax and duty rate due to its national brand. The Malaysian automotive industry is controlled by national cars: PROTON and PEREDUA, accounting for close to 90 percent of cars traded locally annually.

The adoption of international standards, for instance ISO certification was mearnt to enhance the competitiveness in the local and international market place, with the government assisting the small and medium companies in setting up of Industrial technical Assistance Fund to aid in their certification.

According to Economy Watch, Korea has in the past developed many complicated procedures and policies regarding the transfer of technology, leading to the high economic growth and development rate of their country in the recent past, (Arunee, 2003). The government has put a lot of effort in the stimulating technology associated to business and promoting favorable climate to technology development. The government established technology transfer center to facilitate these processes.

The technology transfer coupled with assimilation, forms the competitive infrastructure in the use of technology, the institution has helped the country (Korea) in channeling the a little capital into specific sectors, promoting the idea of risk taking, the protection of the local markets to enhance or encourage the entry of other firms, and building of efficient facilities. It has also helped in the stimulation and influencing the acquisition of foreinghn innovations and technologies and giving incentives the...
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