Car Industry Economic Analysis

6167 Words Jan 28th, 2009 25 Pages
Abstract http://www.nst.com.my/Current_News/NST/Thursday/National/2308174/Article The article titled '16pc fall in motor sales expected ' (Hamid H. and Ismail Z.I. 2008) cites rising fuel prices, inflation and stricter vetting by finance companies on hire purchase loan applications as among the factors contributing to the slowdown of the Malaysian automobile market in the second half of the 2008.
The first part of this essay is antecedent in that it provides a treatment on the Malaysian automobile market. The key topics covered here are the market history, market segments, market performance, market players, market structure and the behaviors of competing firms. The second part of this essay rationalizes the effects of the factors
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The automobile industry hired 16,851 employees, of which 6,101 and 5,800 were Proton’s and Perodua’s respectively. Meanwhile, the total employment created in support of the automobile industry (i.e. the manufacturing of automobile parts and components), in 2003, was estimated to be 23,391 (Mahidin U. and Kanageswary R. 2004).

2. Market Segment

(All figures and charts are based upon data obtained off the Malaysian Automotive Association’s Website, 2008).

A motor vehicle in Malaysia can be registered to either a person or a company, the term used being ‘passenger vehicle’ and ‘commercial vehicle’ respectively (with the former being the majority; see Figure 1).

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Figure 1: Market Segments of the Malaysian Automobile Market (MAA 2008)
The differentiation between ‘passenger vehicle’ and ‘commercial vehicle’ segments the automobile market in the broadest sense. ‘Passenger vehicles’ and ‘commercial vehicles’ can be further broken down according to several types (see Figures 2 and 3). This sequential process of market fragmentation reveals passenger cars as the main constituents of the Malaysian automobile market.

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Figure 2: Market Segments for Passenger Vehicles (MAA 2008)

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Figure 3: Market Segments for Commercial Vehicles (MAA 2008)

3. Major Competitors

(All figures and charts are based upon data obtained off the Malaysian Automotive Association’s Website, 2008).

See Figure 4 for the position of various players in the
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