Will Protonís New Leadership steer it to Success?



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Code :LDS0021A

Year :
2006

Industry :Automobiles

Region : Malaysia

Teaching Note:Not Available

Structured Assignment :Not Available

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Passenger car industry Malaysia, the ASEAN regionís second-largest market for passenger cars after Thailand16, had sold more than 500,000 vehicles annually17. About 20 foreign automakers assembled vehicles in Malyasia. In 2005, Malaysian car sales were 522,000 vehicles i.e. an increase of 38% year-onyear basis.The passenger cars were segmented as compact cars, entry midsize cars, midsize cars, MPV/Van and pickĖup segment19. The National car makers Proton and and Perodua dominated the car market. These two companies and the foreign manufacturers who assembled their vehicles accounted for about 90% of the cars sold in the country...

Perodua Established in 1993, Perodua began its operations in 1994. Perodua established two whollyowned subsidiaries ó Perodua Auto Corporation Sdn. Bhd. which took care of manufacturing activities and Perodua Sales Sdn. Bhd. which was responsible for the sales, marketing and distribution, and after sales service across Malaysia. The production capacity of Perodua plant was about 150,000 units per annum24. The distribution network consisted of 32 sales branches and 142 sales outlets across the nation. Perodua exported to 13 other countries including United Kingdom and Egypt...

Proton: The Beginning Since the early days, the auto industry encompassed an important part of the Malaysian economic development. In the early 1960s, Malaysian economic policies favoured the automobile industry to reduce import burdens, increase local employment opportunities, save foreign exchange, and upgrade local technological features in related industries. Until 1967, the transnational companies from the West and Japan were largely engaged in trading of automobiles...

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Strategic alliances With a desire to share production platform with Volkswagen, Proton in 2005 held talks to strike a strategic alliance for low cost, high-quality parts. Proton intended to take advantage of superior technical capabilities of Volkswagen, and in return Volkswagen expected to utilize the spare manufacturing capacity of Proton at Tanjung Malim plant and thereby export to the Southeast Asian markets. But Proton went a step ahead and showed interests to engage in distribution of Volkswagen cars, which was not accepted by the German manufacturer and the talks failed...


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