A BRIEF STUDY ON THE MALAYSIAN AUTOMOTIVE INDUSTRY

Topics: Marketing, Automotive industry, Volkswagen Group Pages: 8 (2118 words) Published: May 22, 2008
A BRIEF STUDY ON THE MALAYSIAN AUTOMOTIVE INDUSTRY

CONTENTS

Introduction2

Brief overview of the Malaysian automotive industry2

Micro environmental changes in the automotive industry3

Macro environmental changes in the automotive industry5

Conclusion7

References8

INTRODUCTION
The purpose of this report is to discuss the macro and micro environments that are currently impacting on the automotive industry in Malaysia and how these environments have an impact on future marketing activities, namely the four principles of marketing strategies. The discussion in this report will include a brief overview and history of the automotive industry in the past decade and the intricate relationships between the factors that shape the automotive market and the relevant forces that influence it. The micro environment factors that will be discussed are organisation, suppliers, intermediaries, customers, competitors and publics, whereas the macro environment factors are demographic, economic, natural, technological, political and cultural.

BRIEF OVERVIEW OF THE MALAYSIAN AUTOMOTIVE INDUSTRY
Currently, there are four major automobile manufacturers in Malaysia, which are Proton, Perodua, Naza and Inokom. In addition to that, there are 15 assemblers and over 350 parts manufacturers (Arshad n.d.). According to data obtained from Automotive Unit of Industries Division, Ministry of International Trade and Industry, the manufacturers and assemblers in Malaysia have an accumulative capacity of 570,000 units per annum. The value of vehicles, components, parts and accessories from the automotive industry totaled about RM693.4mil in 2001 and major export markets include Singapore, Thailand, Taiwan, Japan, Indonesia and Britain (Opportunities: industrial sector n.d.).

Overall, as of September 2007, sales of new vehicles in Malaysia has risen 4.9% increase from the previous year, which translates to an increase of 44,984 units out of which 37,356 were passenger cars (RNCOS 2007). In the past decade, new vehicle registrations have reached an estimated 500,000 in 2007 from the previous average of 200,000 annually. This effectively makes Malaysia as the largest passenger car market in Asia with annual vehicle sales exceeding 500,000, with 90% either manufactured or assembled locally (Zuraimi 2007). When compared within ASEAN, Malaysia manufactured more passenger cars than Thailand or any other ASEAN nation in 2004, but when trucks and other vehicles are included, the scale of its output was only half of Thailand's (Ito 2005). In line with the ASEAN Free Trade Agreement (AFTA) agreement, the Malaysian government had liberalised the automotive market step-by-step by reducing import tariffs to 5% by 2008 and excise duties from 90-250% in 2005 to 80-200% by 2009 (Ito 2005). The protectionist policies of the government for the local manufacturers are slowly being taken away as part of the free trade agreement, increasing competitiveness and variety in the Malaysian automotive market (Arshad n.d.).

MICRO ENVIRONMENTAL CHANGES IN THE AUTOMOTIVE INDUSTRY
The organisation of a company is important in the research and development of a product. The management of an automotive manufacturer determines the placement, financial investment, quality control and the marketing of a vehicle. Major decisions made within the organisation influences the approach the marketing department will take on bringing the product to the consumer. Any decisions taken by the organisation will eventually affect consumer’s perception of a product.

Suppliers involved in the automotive industry play an important role in bringing quality product to the consumers. By making sure that quality of materials and labour are at an optimum level, the result will be better acceptance of the product by the consumers and increase brand awareness in the consumers’ mindset. Essentially, the type of...

References: pdf (accessed 7 January, 2008).
Business Monitor International, 2007. The Malaysia automotive report: Executive summary. http://www.businessmonitor.com/autos/malaysia.html (accessed 5 January, 2008).
RNCOS. 2007. Rise in vehicle sales in Malaysia. http://www.rncos.com/Blog/2007/
11/rise-in-vehicles-sales-in-malaysia.html (accessed 5 January, 2008).
The Business Times. 2007. Vehicle sales propelling the economy. http://www.rncos.
com/Blog/automobile/archive/2007_06_01_automobile_archive.html (accessed 5 January, 2008).
Ito, Y. 2005. Malaysia revving up the auto industry. Nikkei Weekly. December 6.
BERNAMA. 2006. Petrol price up again. http://www.bernama.com.my/bernama
/v3/news.php?id=182852 (accessed 9 January, 2008).
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