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Proton Holdings Berhad Case Statement

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2.0 HIGHLIGHT ISSUE
Competitor is being defined as any person or entity which is a rival against another . In the automotive industry , companies would normally encounter the presence of one of more competitors since they offer a similar product or service . Therefore , a company would require a new strategy in order to stay ahead in the race to become the dominant manufacturing of automobiles . This has not been the case for local automotive manufactures in Malaysia . Proton Holdings Berhad has been receiving an uproar of issues , including its inability to compete with other automotive industry .
Proton was established in 1983 as the national automobile manufacturer in Malaysia . At first, the company decided to joint venture with Japans …show more content…

The growth of Proton is in fact being characterised for its subsidies and protection . Preferential loans government have ensured that Proton would enjoy interest rate lower than available market and greater funding support than would otherwise be available . In other words , the company was only able to survive with the help of the government subsidies and tariffs which made other branded cars more expensive . However , this benefit doesn’t hold very long when the introduction of the Asian Free Trade Area ( AFTA ) is being announced . The policy would result to greater competition from foreign vehicles that are being produced with a much lower price and the losses in protectionist that was once provided by the government in maintaining the survival of the automotive company . In 2010 , their combined sales declined to 57.2% of the market . The drop in the domestic carmakers’ market share could be explained partly by the changes in the tariff structure , whereby it dropped when Malaysia began its commitment to reducing import tariffs under AFTA …show more content…

With its lack of experiences in competing with other giant auto carmakers , Proton has been facing countless of losses. Proton has been losing market share year after year ever since the establishment of the policy . According to statistic within the first half of 2016 by the Malaysian Automotive Association , the market share has dropped to 13% on sales of 35, 727 units compared with a market share of 15.6% and 50,205 units sold in the previous corresponding period . In the Audited financial statement for financial year 2015 , the company’s net loss widened to RM 646.3 million from RM 461.6 million previously . Its distribution cost of RM260.7 million was more than its gross profit of RM147.9 million in 2015

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