The Impact of ASEAN Free Trade Agreement on Malaysian Automotive Industry - Dissertation Example

verview of Research Methods 3 1.6 Research Significance 4 1.7 Dissertation 4 1.8 Summary 5 Chapter 2: Literature Review 6 2.1 Introduction 6 2.2 Overview of Malaysian Automotive Industry 6 2.3 ASEAN Free Trade Area 9 2.4 Malaysian Governments’ Reaction to AFTA 10 2.5 Impact of AFTA on Industry 13 Chapter 3: Research Methodology 18 3.1 Introduction 18 3.2 Research Approach 18 3.3 Research Methods 19 3.4 Research Design 20 3.4.1 Sample 20 3.4.2 Data Collection Method 21 3.4.3 Data Collection Instrument 22 3.4.4 Data Analysis 22 3.

5 Ethical Considerations 23 3.6 Summary 23 Chapter 4: Findings and Results 24 4.1 Introduction 24 4.2 Section A: Findings from the Customer Interviews 24 4.2.1 Customers’ Perception of Impact of AFTA 24 4.2.2 Customers’ Perception of the fate of PROTON and PERDUA with AFTA 25 4.2.3 Perception of Governments’ Policies 27 4.2.4 Customers’ Preference: Imported vs. Indigenous 27 4.2.5 Customers’ Perception of Problems as a direct result of AFTA 28 4.2.6 Customers’ Perception of Advantages of AFTA 29 4.2.7 Customers’ Perception of the Problems Related to Increase in Traffic Post AFTA.29 4.2.

8 Customers’ Perception of Public Transport 30 4.2.9 Customers’ Perception of Selling Indigenous Cars to buy Imported Cars 30 4.2.10 Customers’ Perception of Need to Support Local Manufacturers 30 4.2.11 Customers’ Opinion of Changes that PROTON and PERODUA should undergo to meet the challenges of AFTA 31 4.3 Section B: Financial Analysis of PROTON and PERODUA 31 4.3.1 Ratio Analysis - PROTON HOLDINGS BHD 31 4.3.2 Ratio Analysis - DAIHATSU 35 Chapter 5: Discussion and Analysis 39 5.1 Introduction 39 5.

2 Malaysian Government’s Approach to Combat impacts of AFTA 39 5.3 Perception of Malaysian consumers on Policies of Malaysian Government 43. The industry has shown a 20% growth in output in 2010 and appears to be heading towards an era of continuous growth in the future (Dinne et al, 2010). While Malaysia started as a country where International brands of cars were initially assembled, the progressive policies of the government have now made the country a manufacturer of world class vehicles.

Perusahaan AutomobilNasional (PROTON) and Perusahaan OtomobilKeduaSdn. Bhd (PERODUA) now produce automobiles that dominate the Malaysian market. This has been made possible by enacting a series of protectionist policies like the requirement of local content, local labour, local partnership on the foreign companies that wanted to open their assembly plants in Malaysia. In addition, the government has proactively invested time and resources in boosting the two national automotive organizations - PROTON and PERODUA.

As a result of the governmental policies, PROTON and PERODUA sell 90% of all domestic requirements while the two companies also export a large number of units worldwide (Business-in-Asia.com (n.d). However, with the implementation of Asian Free Trade Area (AFTA) in the year 2005, the Malaysian automotive industry faced new challenges from neighbouring countries like Thailand and China, in terms of the quality and pricing and availability of imported cars in the market (Gabilaia, 2001).