Proton Supply Chain Challenges

7696 Words May 9th, 2014 31 Pages
GLOBAL SUPPLY CHAIN
Term Paper : Proton Supply Chain Challenges

Table of Contents

1.0 Company Background 1-4
2.0 Problem Statement 5-7 3.0 Significant of Study 8-10 4.0 Proton Supply Chain Weaknesses 11-18 5.0 Recommendation 19-29 6.0 Conclusion 30 7.0 References 31-32

1.0) Company Background
First national car, Proton Saga project was formed embark from the Look East Policy. Perusahaan Otomobil Nasional Sendirian Berhad (PROTON) was formed in 1983 as a company of national car to manage the operation of the national car project. "The Proton Saga is more than just a quality automobile. It is a symbol of Malaysians as a dignified people" quoted by
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Proton begun cautiously and during the first few years it stuck to vehicle assembly and component manufacture. However, by 1985 the company introduced its first car, the Proton Saga, a model based on the Mitsubishi lancer. Substantial government support, in the form of training, loans and start of up capital, ensured Proton got off to a good start. In 1986 the Saga became Malaysia’s top selling car and held 47% of the domestic market. That same year, Proton shipped its first export order of 25 units to Bangladesh. Although the brand soon expanded into Europe and other overseas market, Malaysia remained its primary market. Protected by Malaysia’s formidable barriers to foreign import, Proton enjoyed a near monopoly on the domestic market.
In order to promote local trade, Malaysia introduced some of the highest tax duties on vehicles and motorcycles in the world. Passenger car import tax ranged from 140% to 300%. A 10% sales tax, graduated excise tax (25%-65%), import quotas and local content requirement (40%-65%) all worked to deter foreign competition (AWReasearcher, 2006). These protective measures have largely achieved their objectives. In the 12 years that followed production of the first Saga, Proton enjoyed a dominant share of the rising Malaysian market. The company’s market share peaked in 1993 at 74%. Since then it has declined to its current level of