Business Response to the Regional Demands and Opportunity: A Study of Malaysian Automobile Industry

This paper examines the business response taken by both automakers (Proton) and supplier (Ingress) in preparing them to face the regional market liberalization of AFTA. As the key automaker in Malaysia, Proton sale is mainly in domestic market and able to capture 68 percent of the total market because of the highly tariffs and custom tax is imposed on all foreign cars. However, things won’t be the same when AFTA is implemented. Both Proton and suppliers should be wise to take measures in to be more competitive among in this auto sector by the year 2005. The key competitiveness lies mainly on technology and market. In order to achieve it, they have to consider their limitations accordingly by put more investment particularly in four main core items namely; technology, own design, cost and quality control, and penetrating into new niche market. New export market and new collaboration with foreign giants and counterpart may workable in both domestic-Malaysian, and regional-ASEAN market.