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THE 2008 FINANCIAL CRISIS AND THE STRATEGIES<br />
OF CAR MANUFACTURERS IN MALAYSIA :<br />
AN EXPLORATORY STUDY<br />
Syed Anas AlHabshi<br />
anas.alhabshi@gmail.com<br />
Syed Omar Syed Agil<br />
<strong>Universiti</strong> <strong>Tun</strong> <strong>Abdul</strong> <strong>Razak</strong><br />
syedomar@unirazak.edu.my<br />
ABSTRACT<br />
The 2008 financial crisis has been an extremely challenging one for many businesses<br />
worldwide. Malaysia has not been spared from the difficulties posed by this economic disaster<br />
even though we were supposed <strong>to</strong> be somewhat isolated from being hit very hard. This paper<br />
examines the challenges faced by the Malaysian companies, in particular Au<strong>to</strong>mobile<br />
manufacturers or sometimes known as the Au<strong>to</strong>motive Original Equipment Manufacturers<br />
(OEMs). This paper will also try and single out the least affected companies in Malaysia and<br />
try <strong>to</strong> understand what are the best practices in having a sustainable competitive advantage.<br />
The study has shown that car sales in Malaysia have seen a sharp decline especially<br />
between in the 2 nd half of 2007 and the 1 st half of 2008. This is mainly attributed <strong>to</strong> the global<br />
economic condition which has also had an affect on Malaysia. Nevertheless, some<br />
companies have been harder hit than others and this is what the author has tried <strong>to</strong> study. It is<br />
been found that while short term strategies may have had some influence on the performance<br />
of au<strong>to</strong>motive companies in Malaysia, the long term strategies have a more profound<br />
influence over the performance of companies even during the more difficult times. Companies<br />
which have been steadfast in their long term strategies and have not been swayed by the<br />
different conditions have been less affected than those which have chosen <strong>to</strong> adopt short<br />
term strategies which are not well coordinated. The paper will also share some possible<br />
lessons that can be learnt from other OEMs in trying <strong>to</strong> become competitive players in the<br />
Malaysian au<strong>to</strong>motive Industry.<br />
KEYWORDS: Car Manufacturers, Financial Crisis<br />
INTRODUCTION<br />
The economic crisis facing the world <strong>to</strong>day may be attributed <strong>to</strong> the sub-prime lending in the<br />
USA. Quite simply put, subprime lending is when a financial institution lends out money <strong>to</strong> a<br />
borrower who does not have a good credit rating, and charging higher interest rates due <strong>to</strong><br />
the higher risk of defaulting.<br />
UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 78
Unfortunately when the prices of houses began <strong>to</strong> fall, home owners were forced <strong>to</strong> hold on <strong>to</strong><br />
their loans which by 2008 had already reached the point where the interest payments had<br />
become exceedingly high. It was at this point that the number of defaulters drastically grew.<br />
The average American, especially sub-prime borrowers, succumbed <strong>to</strong> their debts and could<br />
hold on no longer. And finally the bubble burst.<br />
This marked the beginning of the global financial crisis in 2008. The economy in the USA had<br />
contracted significantly and analysts predicted that it would be worse than the one during the<br />
Great Depression of the 1930‟s. Consumer spending suddenly crashed and imports <strong>to</strong> the<br />
USA almost came <strong>to</strong> a grinding halt. Many of America‟s trading partners, such as Japan,<br />
Great Britain, Korea and even Malaysia saw exports shrinking. This resulted in a chain<br />
reaction and before long many countries which relied on exports <strong>to</strong> the USA <strong>to</strong> sustain the<br />
GDP growth would see a contraction in their GDP‟s. Several countries which relied on the<br />
financial services sec<strong>to</strong>r such as Singapore, the United Kingdom and Switzerland were also<br />
badly hit due <strong>to</strong> exposures <strong>to</strong> the US sub-prime mortgages and securitizations. By the end of<br />
2008, the global economy got from bad <strong>to</strong> worse.<br />
The au<strong>to</strong>motive industry is of great importance <strong>to</strong> a nation‟s economy. Due <strong>to</strong> the au<strong>to</strong>motive<br />
industry‟s comprehensive and highly intricate eco-system, a nation‟s economy benefits from a<br />
wide range of avenues. Among them is the job creation that it brings about. This comes from<br />
the au<strong>to</strong>motive manufacturers themselves as well as the extended network of suppliers, sales<br />
network, dealerships, after sales outfits and the list goes on. In addition, the au<strong>to</strong> industry also<br />
has one of the largest economic multipliers of any sec<strong>to</strong>r of the U.S. economy, and is<br />
sufficiently large that its growth or contraction can be detected in changes in the U.S. Gross<br />
Domestic Product. In many states, employment in au<strong>to</strong>motive and au<strong>to</strong>motive parts<br />
manufacturing, ranks among the <strong>to</strong>p three manufacturing industries (Cole D, McAlinden S,<br />
Dziczek K, Menk, D.M, 2008)<br />
The au<strong>to</strong>motive industry also contributes in terms of the Gross Domestic Product (GDP) due<br />
<strong>to</strong> the volume of trade that takes place. This can be seen from the fact that cars are the<br />
second largest purchase by a household after a house. In the USA, the sharp decline of the<br />
au<strong>to</strong>motive sec<strong>to</strong>r leading <strong>to</strong> huge layoffs had caused a spiral effect which contributed <strong>to</strong> the<br />
Great Depression of the 1930‟s. The current bailout of the Detroit Big Three (GM, Ford and<br />
Chrysler) is <strong>to</strong> ensure this does not happen again.<br />
The current global au<strong>to</strong>motive industry is in dire straits. Many car manufacturers across all<br />
continents are feeling the pinch. Declining sales, contracting revenues, shrinking profits and<br />
rising inven<strong>to</strong>ries are a common trend everywhere. Since the au<strong>to</strong>motive industry is very<br />
competitive and severely capital intensive, altering the business course could be likened <strong>to</strong> a<br />
huge barge in the middle of the ocean trying <strong>to</strong> manoeuvre around ice-bergs. Once a course<br />
has been set, changing it abruptly is not possible as was the case with the “unsinkable” ship<br />
the „Titanic‟ in its maiden voyage in 1912.<br />
When au<strong>to</strong>motive OEMs are in trouble, they not only pose a threat <strong>to</strong> themselves but also <strong>to</strong><br />
the whole eco-system. Suppliers are not spared and so are the dealers, distribu<strong>to</strong>rs and even<br />
those in peripheral businesses such as logistics, after sales and financiers.<br />
Measures <strong>to</strong> Cushion the 2008 Crisis<br />
The Malaysian government has taken some drastic measures over the last few months in the<br />
forms of stimulus packages. The first stimulus package of RM7 billion was announced on<br />
November 4, 2008. Based on a letter from Datuk Seri Najib <strong>Tun</strong> <strong>Razak</strong> that was published in<br />
the Wall Street <strong>Journal</strong> on November 26, Najib stated the following. “On November 4, I<br />
introduced a 7 billion ringgit ($1.93 billion) pro-growth stimulus package <strong>to</strong> implement projects<br />
with high multiplier effects, building on the previously announced 5 billion ringgit allocation of<br />
existing investment capital <strong>to</strong> ValueCap, Malaysia's asset management company.<br />
UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 79
The stimulus package as a whole is designed <strong>to</strong> enhance domestic growth and improve<br />
market confidence. This package ensures that a larger segment of the population will realize<br />
the benefit of productive expenditure from the government.<br />
An <strong>article</strong> in the Business Times published on March 11, 2009 carrying the title<br />
“‟Unprecedented move' <strong>to</strong> avert recession” reported that on March 10 2009, Najib announced<br />
another stimulus package, only this time with a much larger quantum. The second stimulus<br />
package dubbed the mini budget <strong>to</strong>talled RM60 billion. Najib said that the large stimulus<br />
package was "unprecedented in the nation's economic his<strong>to</strong>ry" and necessary given the<br />
worsening global economy. Following the unveiling of the first stimulus package in November<br />
2008, Najib said that “…without these efforts, the economy faces the prospect of a deep<br />
recession”. The second stimulus package has four major thrusts which are <strong>to</strong> reduce<br />
unemployment and increase employment opportunities; ease the burden on the rakyat; help<br />
the private sec<strong>to</strong>r; and build capacity. Najib also announced the au<strong>to</strong>motive scrapping policy<br />
where a cus<strong>to</strong>mer wishing <strong>to</strong> buy a Pro<strong>to</strong>n or a Perodua may opt <strong>to</strong> scrap their old cars (10<br />
years or older) and receive a rebate of RM5,000 for it.<br />
Global Au<strong>to</strong>motive Industry Scenario<br />
The global au<strong>to</strong>motive industry has never seen a worse condition than the one it is currently<br />
in <strong>to</strong>day. Currently, the primary news headlines in the au<strong>to</strong>motive industry has been about<br />
shrinking demands; planned plant shutdowns, plant closures, and job cuts. Among the <strong>to</strong>p<br />
news so far has been the announcement that Toyota has forecast lower profits for 2010 by<br />
more than 80%. This is primarily attributed <strong>to</strong> the rising Yen and the weak global car sales. In<br />
Europe, BMW had announced that it had posted a fourth-quarter loss before interest and<br />
taxes of 718 million Euros or a 78% decline, primarily attributed <strong>to</strong> weaker car markets, “risk<br />
provisions” and personnel costs.<br />
RESEARCH PROBLEM<br />
The situation in Malaysia, though not as bad, is still relatively poor. When the economy slows<br />
down, consumer spending also reduces drastically, more so on the big ticket items such as<br />
the purchase of property, leisure holidays and cars. Due <strong>to</strong> this correlation, it would be safe <strong>to</strong><br />
say that the au<strong>to</strong>motive industry is one of a few key indica<strong>to</strong>rs <strong>to</strong> predict the economic health<br />
of a country. The number of new vehicles registered is one of the lagging indica<strong>to</strong>rs<br />
prescribed by the Malaysian Department of Statistics. 1<br />
On this note, it was a clear signal that the Malaysian economy was on a slight decline when<br />
the Malaysian Au<strong>to</strong>motive Association (MAA) announced that the Total Industry Volume (TIV)<br />
for 2009 would contract by approximately 12.2%. Passenger car TIV (new registered<br />
vehicles) in 2008 was 497,459 units, but in 2009, the figure is only 436,800 units. This was<br />
compounded when the car sales for the month of January 2009 was significantly lower as<br />
compared <strong>to</strong> the corresponding period the year before. Total passenger car sales for January<br />
2008 was 36,396 units while it was only 30,189 units in January 2009, corresponding <strong>to</strong> a<br />
17% drop in sales.<br />
1 Lagging indica<strong>to</strong>rs tell us what had happened <strong>to</strong> the economy. It measures the performance of cyclical<br />
movements of the leading and coincidental indices – “Malaysia Economic Indica<strong>to</strong>rs – Leading,<br />
Coincident and Lagging Indices”; Department of Statistics, Malaysia; December 2008<br />
UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 80
The primary reason why this paper has been initiated was <strong>to</strong> examine the impact of the 2008<br />
financial crisis on the au<strong>to</strong>motive industry in Malaysia and <strong>to</strong> understand how some car<br />
manufacturers have been able <strong>to</strong> sustain profitability or at least limit losses in these trying<br />
times. The paper will try <strong>to</strong> single out car manufacturers in Malaysia which have been the<br />
least affected by the financial crisis and also <strong>to</strong> identify what the strategies are in trying <strong>to</strong><br />
address the challenges brought about by the crisis. The paper will also try <strong>to</strong> identify the<br />
fac<strong>to</strong>rs which have influenced the performance of these companies and their abilities <strong>to</strong><br />
sustain profitability during these <strong>to</strong>ugh times.<br />
LITERATURE REVIEW<br />
Significance of the Au<strong>to</strong>motive Industry <strong>to</strong> the Economy<br />
The au<strong>to</strong>motive industry can be considered <strong>to</strong> be the single largest manufacturing sec<strong>to</strong>r in<br />
the world. At least 10% of the Japanese and American Gross Domestic Product and<br />
employment are generated from this industry. By 1988 the European Union‟s 12 member<br />
states produced a <strong>to</strong>tal output value of 80 billion Euros and employed a <strong>to</strong>tal of 1 million<br />
workers. The largest producing nations are the United States of America, Germany, France,<br />
Italy, Spain and the United Kingdom.<br />
Rosli (2004) wrote: “Efforts <strong>to</strong> develop the au<strong>to</strong>mobile industry would have significant impact<br />
on resource-based industries, such as iron and steel, chemical, nonferrous metal, rubber and<br />
plastic-related industries as well as petroleum based industries; and on non-resource-based<br />
industries, namely electrical and electronics-related parts. In the tertiary sec<strong>to</strong>r, it provides<br />
service-related activities, such as stamping, repairing, designing and engineering, banking,<br />
shipping, s<strong>to</strong>ring, insurance and distributing and marketing channels. Of significance, the<br />
au<strong>to</strong>mobile industry requires a set of production systems linking a wide range of industrial<br />
organizations and technologies with great variations in size and sophistication. Over the span<br />
of 23 years, (1980 – 2003), it was only during six years, that the proportion of the passenger<br />
vehicles <strong>to</strong> the <strong>to</strong>tal vehicle production was less than 70%; the rest were either over 70% and<br />
sometimes even exceeding 80%. On average about 76% of the TIV were passenger cars and<br />
the rest commercial vehicles. This is in contrast with Thailand, Indonesia and the Philippines<br />
where the production is dominated mainly by commercial vehicles over passenger vehicles.”<br />
Fac<strong>to</strong>rs affecting the Performance of the Au<strong>to</strong>motive Industry<br />
There are several fac<strong>to</strong>rs that can significantly affect the performance of the au<strong>to</strong>motive<br />
industry in a given market. Since the purchase of a vehicle can be considered a big ticket item<br />
and therefore account for a significant portion of the household income, the purchase of a<br />
vehicle is a very serious consideration for most people. In Malaysia, car loan tenures have<br />
grown considerably longer. Loan tenures of up <strong>to</strong> nine years are very normal in most cases<br />
and in some special cases such as the Government Servant Scheme, tenure of 10 years is<br />
also available for selected models. However, this is just the tip of the iceberg. The more<br />
important consideration is the approval of the loan when an individual applies for one <strong>to</strong> buy a<br />
car. This is probably the biggest lever in determining the success or failure of the au<strong>to</strong>motive<br />
market in any given country.<br />
Armin Baniaz, acting head of Pro<strong>to</strong>n Edar Dealers Association (PEDA) was quoted as saying<br />
“... banking facilities and hire-purchase loans are the main fac<strong>to</strong>rs that will determine the<br />
sustainability of the au<strong>to</strong>motive industry. On <strong>to</strong>p of that, over 90% of car dealers and vendors<br />
operate with banking facilities while over 90% of cus<strong>to</strong>mers buy using hire purchase loans.<br />
UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 81
Currently, the approval rate for car loan applications in Malaysia is at 40% but it could go<br />
even lower this year”. This means that only 40% of cus<strong>to</strong>mers who book a car at a Pro<strong>to</strong>n<br />
dealership will get a loan approval. In other words, the loan rejection is a staggering 60%. It is<br />
not really a matter of getting buyers for the cars, it is about getting buyers who qualify <strong>to</strong> get a<br />
loan <strong>to</strong> buy the car in the first place that matters.<br />
The other main fac<strong>to</strong>r affecting the au<strong>to</strong>motive industry is the availability of the scrapping<br />
policy. The following section will dwell in<strong>to</strong> this area and uncover some of the truths and<br />
myths of the scrapping policy. There are several countries which have already success<strong>full</strong>y<br />
implemented the policy and there are some others which are still coming <strong>to</strong> grips with the idea.<br />
In the recently announced second stimulus package by the Malaysian government, a<br />
scrapping policy was introduced. During the announcement of the “Second Stimulus<br />
Package” on 10 March 2009, Datuk Seri Najib <strong>Tun</strong> <strong>Razak</strong>, at the time Malaysia‟s Deputy<br />
Prime Minister, who also holds the portfolio of Malaysia‟s Finance Minister, disclosed that the<br />
au<strong>to</strong>motive sec<strong>to</strong>r also got a shot in the arm, with a rebate of RM5,000 given <strong>to</strong> owners who<br />
trade in their cars of at least 10 years old for the purchase of a new Pro<strong>to</strong>n or Perodua vehicle.<br />
It is still unclear how this will affect the market as it is only applicable <strong>to</strong> Pro<strong>to</strong>n and Perodua<br />
cars.<br />
When the International Trade and Industry Minister, Tan Sri Muhyiddin Yassin was asked <strong>to</strong><br />
elaborate on the package, he disclosed that “…the government will finance part of the<br />
discount borne by Pro<strong>to</strong>n and Perodua. This incentive will, <strong>to</strong> a certain extent, give the<br />
opportunity <strong>to</strong> defend the number of cars sold this year. …there were more than one million<br />
cars aged 15 years and above while 10-year-old cars were less but the number is still big…<br />
With this offer, I hope 100,000 cars can be sold and this is a big number. "I believe though the<br />
government has <strong>to</strong> forgo RM5,000 income for a car, the returns <strong>to</strong> the industry and economic<br />
activities are even better,".<br />
Getting the right car <strong>to</strong> the right market requires some degree of market intelligence. Ishak, N.<br />
K., Mutum D., Ghazali, E. and Fan C. K. (2006) suggested that the current era of relationship<br />
marketing, is <strong>to</strong> ensure business success through an in-depth understanding of the<br />
cus<strong>to</strong>mer‟s needs and wants. This should cover current as well as potential cus<strong>to</strong>mers alike.<br />
This is because when cus<strong>to</strong>mers are highly satisfied, they are more likely <strong>to</strong> be loyal. Giving<br />
cus<strong>to</strong>mers what they want is a key strategy <strong>to</strong> improve profits. To do this, car manufacturers<br />
have opted <strong>to</strong> build cars using the „modular assembly concept‟. Using common platforms,<br />
interchangeable front end and back end architectures and sub assembly modules, cars can<br />
now be built more efficiently, and with added flexibility <strong>to</strong> cus<strong>to</strong>mize specific requests(C.<br />
Benko and W. McFarlen, 2003) Although CRM is relatively new in Malaysia, it has been found<br />
<strong>to</strong> be useful <strong>to</strong> au<strong>to</strong>motive distribu<strong>to</strong>rs and dealers <strong>to</strong> identify and reach target cus<strong>to</strong>mers,<br />
reach specific cus<strong>to</strong>mer segments and <strong>to</strong> identify various cus<strong>to</strong>mer needs. This is where<br />
Toyota has mastered the art. With its vast array of models, each specific country can build a<br />
market and sell the products that best suit their needs.<br />
Strategies of the Big Five Car Manufacturers<br />
Upon close examination of the recent data, it was found that almost every model of vehicle<br />
analyzed had a decline in sales for 2008 from the same month in the previous year. The only<br />
models which did not have a decrease in sales for the period was the Honda Jazz, Pro<strong>to</strong>n<br />
Saga, the Honda Accord and the Toyota Vios. A tabulation of registered sales by OEM<br />
indicates clearly that the <strong>to</strong>p 5 manufacturers are Perodua, Pro<strong>to</strong>n, Toyota, Honda and<br />
Nissan. It is only fair <strong>to</strong> take a closer look at the least affected au<strong>to</strong>motive OEMs, namely<br />
Toyota, Honda, Pro<strong>to</strong>n, Perodua and Nissan. The strategies of each company will be<br />
discussed in the following sections.<br />
UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 82
Strategies Employed by Toyota<br />
The success of Toyota is not something that was initiated overnight. Instead, Toyota has long<br />
been working on its durability. Today, Toyota is renowned for its performance, endurance and<br />
above all, its durability. Until very recently, Toyota has always been very conservative in its<br />
designs. Shapes and styles which were deemed <strong>to</strong> have any negative impact on the durability<br />
or impacted the manufacturing processes were discounted earlier on in the development<br />
process. This managed <strong>to</strong> create the level of assurance that the Toyota is a very reliable car.<br />
However, Toyota has realized that the discerning cus<strong>to</strong>mer has begun <strong>to</strong> demand more from<br />
their cars and in recent years, Toyota designers have managed <strong>to</strong> overcome the barriers they<br />
had before and have come up with bolder and more revolutionary designs such as in the new<br />
Toyota Camry and Vios.<br />
In terms of after sales, Toyota has managed <strong>to</strong> <strong>to</strong>p the list in the JD Powers Cus<strong>to</strong>mer<br />
Satisfaction Index (CSI) Ratings 2 . (CSI measures the satisfaction of vehicle owners who<br />
visited the dealer service department for maintenance or repair work during the first three<br />
years of vehicle ownership. The study, now in its 6 th year in Malaysia, provides an overall<br />
cus<strong>to</strong>mer satisfaction index score based on six measures: service initiation, service advisor,<br />
in-dealership experience, service delivery, service quality, and user-friendly service). Toyota<br />
is usually in the <strong>to</strong>p 5 positions ever since the study was conducted in Malaysia. But for the<br />
first time, Toyota has not only <strong>to</strong>pped the list, but done so at an amazing 767 points, with<br />
Honda and Nissan trailing at 755 and 746 points respectively. This means that Toyota has<br />
gone well beyond business as usual <strong>to</strong> try and delight cus<strong>to</strong>mers as they go for the routine or<br />
scheduled maintenance. Cus<strong>to</strong>mers always wish <strong>to</strong> have a trouble free ownership experience.<br />
With the level of reliability of the cars produced coupled with the level of service that is<br />
unsurpassed, Toyota is well on its way <strong>to</strong> a promising future in Malaysia.<br />
Among the many promotions Toyota is working on is the Toyota financing packages. With a<br />
range of packages available from “Toyota Drive” which is a basic loan package offered by<br />
UMW Toyota for its cus<strong>to</strong>mers, “Al-Ijra‟ Thumma Al-Bai” or AITAB which is an Islamic<br />
financial service for its discerning Muslim cus<strong>to</strong>mers, Flexi Plan, which is a financial service<br />
where the interest is charged on reducing balance and finally conventional Hire Purchase<br />
packages at competitive rates.<br />
Strategies Employed by Honda<br />
Recently, Honda Malaysia launched a promotional campaign offering free maintenance on<br />
selected Honda cars for a period of 2 years. On the Honda website and also at the<br />
showrooms, cus<strong>to</strong>mers can easily obtain the periodical service prices which the cus<strong>to</strong>mers<br />
will have <strong>to</strong> pay for during the life of the vehicle. This price indication will serve as very good<br />
guide <strong>to</strong> the cus<strong>to</strong>mers especially those who have the perception that the price <strong>to</strong> maintain a<br />
Honda vehicle is exorbitant. By giving out this guide, Honda Malaysia is able <strong>to</strong> squash the<br />
misperception that the maintenance on a Honda vehicle is expensive. In fact, it may even<br />
support the claim that Honda vehicles are actually cheaper than its competi<strong>to</strong>rs. Given that<br />
the Honda brand value is high among Malaysians, having a reasonably low cost of<br />
maintenance and thus low <strong>to</strong>tal cost of ownership will increase the brand value even further.<br />
Having a good product with a lower <strong>to</strong>tal cost of ownership is definitely a Unique Value<br />
Proposition (UVP).<br />
Honda has also been adopting a strategy of branding the vehicle as a status symbol<br />
especially in Malaysia. This is the reason why the sales figures of Honda vehicles are not as<br />
2 CSI is a nameplate study, which means that performance is reported at the manufacturer level (i.e.,<br />
Pro<strong>to</strong>n, Perodua, Toyota, etc.), rather than at the model level (i.e., Saga, Myvi, Vios, etc.).<br />
http://www.jdpower.com/faqs-au<strong>to</strong>/ March 8, 2009<br />
UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 83
large as Toyota, which has a volume strategy. Thus far, Honda has been quite successful in<br />
elevating the brand value of its vehicles. But none of these measures would give a boost <strong>to</strong><br />
the brand if the product did not meet the tastes and needs of the cus<strong>to</strong>mers in the first place.<br />
Among the relevant aspects are styling, quality and performance. But product quality is by far<br />
a winning criterion. Cus<strong>to</strong>mers do not appreciate having <strong>to</strong> go <strong>to</strong> the service centres <strong>to</strong><br />
complain about problems. Given a choice, cus<strong>to</strong>mers would prefer not <strong>to</strong> have <strong>to</strong> visit the<br />
service centre at all after the purchase of their cars. In Malaysia, Honda and Toyota vehicles<br />
are perceived <strong>to</strong> have the least number of defects per vehicle. In the 2008 JD Power Initial<br />
Quality Study 3 , Honda City & Honda Civic both came out <strong>to</strong>p of the list in the entry midsize<br />
segment and midsize segments respectively. This is the kind of achievement that allows<br />
Honda <strong>to</strong> command an even higher premium <strong>to</strong> its brand.<br />
Strategies Employed by Perodua<br />
Perodua has had phenomenal success with the Myvi model which was launched in 2005.<br />
Since then nearly 300,000 units have been sold. And recently, the Viva has also enjoyed a<br />
decent degree of success, albeit not as good as the Myvi. Unfortunately the Kenari and the<br />
Nautica have not been as largely accepted. With the Myvi and Viva, Perodua‟s success was<br />
hinged on the fact that Perodua knew exactly what the cus<strong>to</strong>mer was looking for. The main<br />
issues were size, fuel consumption and ease of ownership. It was here that Perodua<br />
managed <strong>to</strong> get a grasp of the cus<strong>to</strong>mer‟s wants, needs and desires. The Myvi has several<br />
key unique selling propositions (USP), mainly space, ease of use and ease of maintenance.<br />
The Viva‟s USP was primarily fuel consumption and since the price of fuel shot up from<br />
RM1.92 <strong>to</strong> RM2.70 shortly after the Viva was launched, it literally clinched the deal <strong>to</strong> the<br />
point where Perodua had <strong>to</strong> increase its plant capacity just <strong>to</strong> cater for the surge in demand.<br />
Strategies Employed by Pro<strong>to</strong>n<br />
Pro<strong>to</strong>n has not had significant success with some of its models especially since the Gen2,<br />
Juara, Savvy and Satria Neo. At the time these models were launched, Pro<strong>to</strong>n was under the<br />
impression that cus<strong>to</strong>mers should be exposed <strong>to</strong> these futuristic models. In other words,<br />
Pro<strong>to</strong>n was adopting a push-strategy. Unfortunately, for several years Pro<strong>to</strong>n was faced with<br />
a dismal sales figure with these models. One of the fundamental errors was the fact that the<br />
Malaysian market was not yet ready for the vehicles that Pro<strong>to</strong>n was trying <strong>to</strong> market in<br />
Malaysia using the Pro<strong>to</strong>n brand name. These models were developed with European tastes.<br />
For example, in the UK, hatchback cars are more popular than sedans by a large proportion.<br />
However, in Malaysia this is the reverse. In the Malaysian market, sedan vehicles sell much<br />
better than hatchbacks. This was clearly proven when the Pro<strong>to</strong>n Gen.2 was developed in<strong>to</strong> a<br />
sedan and introduced as the Pro<strong>to</strong>n Persona, sales began <strong>to</strong> show a remarkable<br />
improvement.<br />
Another model which has not been favourably accepted in the Malaysian market is the Pro<strong>to</strong>n<br />
Savvy. Although most magazines both in Malaysia and overseas have given very good<br />
reviews with a string of awards under its belt such as the Malaysian Guinness Book of<br />
Records for most fuel efficient car in its segment, and the best Small Car of the Year 2006,<br />
the car sales have still been less than satisfac<strong>to</strong>ry. Again, it boils down <strong>to</strong> the fact that Pro<strong>to</strong>n<br />
has tried <strong>to</strong> offer <strong>to</strong> the discerning Malaysian market, a car that is not desired or wanted in the<br />
first place. Among the reasons why the Pro<strong>to</strong>n Savvy has had dismal sales is due <strong>to</strong> the fact<br />
3 The 2008 Malaysia Initial Quality Study (IQS) is based on evaluations from approximately 3,200<br />
owners who purchased their new vehicle between September 2007 and May 2008. Vehicles evaluated<br />
included 52 passenger car, pickup and utility vehicle models covering 15 different brands. The study<br />
was fielded between March and July 2008.<br />
UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 84
that it is powered by a 1.2 litre Renault engine. Somehow, Malaysians have had a series of<br />
bad experiences with French cars. In the case of Pro<strong>to</strong>n, 2 earlier cars, the Pro<strong>to</strong>n Tiara and<br />
the Pro<strong>to</strong>n Waja 1.8 were also fitted with French engines. The Tiara had a 1.1 litre Citroen<br />
engine while the Waja 1.8 had a 1.8 litre Renault engine. Both these cars were very well<br />
known for the huge number of problems the cars had, including the prohibitively high cost of<br />
maintenance and spare parts. As a result, these negative perceptions were just <strong>to</strong>o strong for<br />
Pro<strong>to</strong>n <strong>to</strong> work against. To date only about 37,000 vehicles have been sold since its launch in<br />
June 2005. Another setback was that the car was launched only weeks after the successful<br />
launch of the Perodua Myvi. Pro<strong>to</strong>n had not considered the Myvi as a direct competi<strong>to</strong>r as it<br />
was one segment larger than the Savvy. Unfortunately, the Malaysian public did not have the<br />
same impression and a direct comparison was frequently made by cus<strong>to</strong>mers and salesmen<br />
alike. Hence, the Pro<strong>to</strong>n Savvy was often at the losing end. Cus<strong>to</strong>mers made their buying<br />
decisions based on what they knew best, and that was the interior space of the vehicle. The<br />
fact that Pro<strong>to</strong>n was using a foreign engine which was markedly more expensive due <strong>to</strong> the<br />
sudden increase in the exchange rate of the Euro <strong>to</strong> the Malaysian Ringgit only compounded<br />
the issue even further.<br />
The Turnaround<br />
Pro<strong>to</strong>n began <strong>to</strong> embark on a Business Turnaround in 2006. After the new management <strong>to</strong>ok<br />
over, various changes were immediately effected. There were a list of 11 main initiatives<br />
ranging from “Enhancing the Product Portfolio”, “Improving Quality”, “Improving Sales and<br />
Distribution” and “Enhancing Human Capital” just <strong>to</strong> name a few. In the initiative “Enhancing<br />
Product Portfolio”, several sub-initiatives were developed such as establishing a „New Product<br />
Introduction‟ or NPI process. This process had several gateways that had <strong>to</strong> be met diligently.<br />
By complying <strong>to</strong> this process, the management at Pro<strong>to</strong>n could ensure that the products<br />
developed met the necessary quality standards and equally important, Pro<strong>to</strong>n could sustain<br />
the manufacture of the components since the vendors in turn had <strong>to</strong> comply with the NPI.<br />
Additionally, Pro<strong>to</strong>n was <strong>to</strong> follow a new product development process and an element called<br />
Voice of the Cus<strong>to</strong>mer or VOC was introduced. A new division called the Marketing Division<br />
was introduced and this division <strong>to</strong>ok on the daunting role of facing cus<strong>to</strong>mers and identifying<br />
exactly what it was that they liked about Pro<strong>to</strong>n cars and also more importantly, what they did<br />
not like about the car. The list of dislikes was obviously very high. All these findings were then<br />
compiled and the information was then fed back <strong>to</strong> the Research & Development Division in<br />
order for the development of the new car <strong>to</strong> begin. Due <strong>to</strong> the product development efforts<br />
and the positive response <strong>to</strong> cus<strong>to</strong>mers‟ needs and complaints, new models such as Persona,<br />
Pro<strong>to</strong>n Saga with the 1.3 litre Campro engine which was developed in house and Exora which<br />
enhanced cus<strong>to</strong>mer‟s trust in the product and in the brand.<br />
Quality Assurance<br />
Another common practise among OEMs is <strong>to</strong> have Resident Engineers at the Vendor‟s site<br />
during the initial stages of production, just <strong>to</strong> ensure that the vendor complies with the basic<br />
quality requirements. A resident engineer is usually an experienced engineer from the OEM,<br />
typically from the Quality, Procurement or Production divisions, and is stationed at the vendor<br />
premises for a pre-defined period of time. The resident engineer will advise the vendor about<br />
the specific requirements of the OEM which the vendor may not already be familiar with. The<br />
Resident Engineer will normally ensure that the vendor production has stabilized before<br />
returning back <strong>to</strong> base.<br />
UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 85
Strategies Employed by Nissan<br />
Up until 2007, Nissan sales in Malaysia were almost negligible. Nissan did not have any<br />
models that were really making any impact or generating any significant interest in buyers.<br />
When the Nissan Grand Livina was launched however, sales began <strong>to</strong> see an immediate<br />
increase and the Nissan brand has become another major player in Malaysia again.<br />
The MPV market in Malaysia has been growing steadily over the years, from a meagre<br />
13,570 units in 2001 <strong>to</strong> 53,744 units in 2008. It is within this segment that the Nissan Grand<br />
Livina has managed <strong>to</strong> gain popularity. Malaysians are not only looking for a people mover,<br />
they are looking for one that is both affordable and practical with a satisfac<strong>to</strong>ry level of<br />
comfort <strong>to</strong> boot. The Livina managed <strong>to</strong> fill a void that had been there for a long while.<br />
Suddenly cus<strong>to</strong>mers were given a choice they liked and they snapped it up. Nissan had a<br />
waiting list of approximately 10 months in the initial stages of the Livina introduction.<br />
After understanding what the cus<strong>to</strong>mers wanted, Nissan came up with 1.6litre and 1.8litre<br />
versions of the Livina. Nissan needed <strong>to</strong> introduce both variants since there was a demand<br />
for both engine types. This was clearly proven when the market share for sales in 2008 for the<br />
Nissan Grand Livina 1.6 and 1.8 were 10% and 12% of the MPV market respectively.<br />
Unfortunately, the sedans that Nissan introduced have not caught on as well as their rivals.<br />
One possible fac<strong>to</strong>r is the price of the vehicles themselves. Perhaps if they were marginally<br />
cheaper then they would have caught on. Another aspect is the overall size of the vehicles,<br />
which are relative smaller than their rivals, the Honda City and Toyota Vios. The primary<br />
reason why only the Livina made great impact was that the Malaysian cus<strong>to</strong>mers were<br />
looking for an alternative for the MPV‟s available. In the case of the sedan market, the Honda<br />
City and Toyota Vios had already made a strong presence in their segment and thus new<br />
entrants would find penetrating the market <strong>to</strong> be extremely difficult. This would be<br />
compounded by the high perceived price of the car and the fact that it had yet <strong>to</strong> prove itself in<br />
terms of reliability, a convenient service network and availability of reasonably priced spare<br />
parts.<br />
LESSONS TO BE LEARNT BY OTHER OEMS IN MALAYSIA<br />
Having seen the various strategies employed by the companies mentioned above, it is a good<br />
idea <strong>to</strong> summarize what we have observed so that other OEMs can benefit from this research.<br />
The findings are discussed below.<br />
Importance <strong>to</strong> Continue Product Development Efforts<br />
For most of the Au<strong>to</strong>motive OEMs, the current economic turmoil is a very alarming and<br />
troubling time. However, product development initiatives must never be neglected. Although<br />
product development poses a huge cost outflow where the typical product development cost<br />
including <strong>to</strong>oling, jigs and dies is about RM500 Million, it cannot be sidelined, especially<br />
during economic slowdowns. This is because when the economy begins <strong>to</strong> improve, car<br />
companies need a fresh product <strong>to</strong> entice buyers. Only the car OEMs with the right products<br />
at the right time will be able <strong>to</strong> capitalise on the positive economic climate. By declaring huge<br />
losses, some companies such as Toyota may have already taken in<strong>to</strong> consideration the<br />
capital expenses on its product developments even though potential revenues may not be<br />
able <strong>to</strong> support that cash outflow in the same year. But the benefit is a ready and <strong>full</strong>y<br />
developed range of models as soon as the economy picks up again. All the <strong>to</strong>p 5 companies<br />
UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 86
in this study have a new model in their stable. From Toyota‟s 2007 Vios, Pro<strong>to</strong>n‟s 2007<br />
Persona and 2008 Saga and the recently launched 2009 Exora, Perodua‟s 2007 Viva,<br />
Nissan‟s 2007 Grand Livina and the 2009 Honda City, all these models were either developed<br />
during or just shortly before the crisis struck. If these models were not developed and<br />
therefore were not available for launch, the sales of the said OEMs would probably not be as<br />
good.<br />
Managing the Supply Chain<br />
OEMs also need <strong>to</strong> be concerned about their suppliers. During the development process,<br />
some suppliers may have difficulty with financing. Especially during these trying times when<br />
the revenues are fast reducing due <strong>to</strong> shrinking demands. Credit lines tend <strong>to</strong> become a big<br />
problem due <strong>to</strong> the poor credit rating of the au<strong>to</strong>motive industry in general. At this time, the<br />
OEM must be firmly behind the supplier <strong>to</strong> ensure that the new model is developed as per<br />
design intent or else, certain components may not be ready at the time of launch and this<br />
would not be acceptable at all. The problem is that the financial distress is not only being<br />
experienced by the smaller suppliers but even by the big global players such as Delphi,<br />
Continental and Denso just <strong>to</strong> name a few.<br />
For Malaysian National Car maker Pro<strong>to</strong>n, where product development is carried out<br />
holistically in Malaysia, getting the <strong>full</strong> support from the suppliers is very crucial. Fortunately,<br />
the economic slowdown in Malaysia has yet <strong>to</strong> reach its peak. Nevertheless, many suppliers<br />
are already in desperate times, trying <strong>to</strong> secure financing and extending credit lines. Without<br />
the sufficient funds, product development may not be comprehensive. Hence, Pro<strong>to</strong>n would<br />
have <strong>to</strong> lend an extra hand <strong>to</strong> cover for some of the vendor related product development costs.<br />
The main problem here is that the cash situation of Pro<strong>to</strong>n as a company will also be under<br />
severe threat. This activity may potentially result in the product development costs escalating<br />
well beyond the RM500 Million mark, which can be financially impossible. This is where the<br />
government funds become extremely important <strong>to</strong> ensure the complete au<strong>to</strong>motive eco<br />
system is sustained. The recently announced Au<strong>to</strong>motive Development Fund (ADF) is one<br />
such government initiative from the Malaysian government with primary intent of saving the<br />
au<strong>to</strong>motive vendor community in Malaysia.<br />
Toyota has a system called “Kieretsu” whereby the vendors are part of the “Toyota family”. In<br />
this way, Toyota is able <strong>to</strong> capitalise on the economies of scale and procurement can be<br />
centrally controlled from Japan for all its manufacturing outfits including subsidiary companies<br />
such as Daihatsu and Perodua. In doing so, raw materials can be purchased as prices<br />
significantly are lower than any competi<strong>to</strong>r is able <strong>to</strong> get. This gives Toyota the upper hand <strong>to</strong><br />
reduce the Bill or Material (BOM) costs even further.<br />
Bringing the Right Product <strong>to</strong> Market<br />
Currently, since most cus<strong>to</strong>mers have concerns about making purchases on big ticket items,<br />
it does not mean they will not make the purchase at all. Instead, they may start <strong>to</strong> scout<br />
around and compare products on offer from various OEMs. When their financial status<br />
permits, they will quickly make the purchase based on the decisions made earlier. This<br />
means, the purchase is merely delayed. Therefore, OEMs cannot afford <strong>to</strong> s<strong>to</strong>p offering the<br />
products just because the economy has slowed down. Rather, entice the cus<strong>to</strong>mers so that<br />
the moment they can afford the car, the first one they consider is the one which has won their<br />
hearts when they were in the financial difficulty.<br />
UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 87
In this regard, it can be noted that Naza Kia has indicated that it intends <strong>to</strong> bring in the Kia<br />
Forte, a C-Segment sedan which is very popular in Korea, China and parts of Europe in<strong>to</strong> the<br />
Malaysian market. Judging from the success of the Toyota Vios, Honda City and Pro<strong>to</strong>n<br />
Persona, this car may have a high possibility of success since most of the cars mentioned are<br />
also in the C-Segment Sedan category which is a very dominant category in the Malaysian<br />
market.<br />
The Pro<strong>to</strong>n Exora, Pro<strong>to</strong>n‟s first attempt at a Multi Purpose Vehicle (MPV) is also a very brave<br />
move. The vehicle was launched on April 14 2009. This is the beginning of the economic<br />
slowdown of the Malaysian economy. So far bookings have been quite positive for a typical<br />
launch of this magnitude. Given that the economy is not at its best health, and that this is the<br />
first MPV from Pro<strong>to</strong>n, especially with a 1.6 Litre engine, the number of units sold is very<br />
encouraging. Initial reports by a select few journalists who were privileged <strong>to</strong> test drive the<br />
vehicles shortly before the launch have been nothing but praise. But it will take a lot more<br />
than merely journalist evaluations <strong>to</strong> secure bookings and ultimately sales of this kind of<br />
vehicle. The MPV market in Malaysia has been growing steadily over the years. Currently,<br />
<strong>to</strong>tal MPV sales is approximately 11% of Total Industry Volume and with more players<br />
introducing MPV‟s recently, that ratio may well grow. The recent success s<strong>to</strong>ries have been<br />
the Toyota Avanza, Toyota Innova and Nissan Grand Livina. It will be interesting <strong>to</strong> see how<br />
the Pro<strong>to</strong>n Exora will fare in this segment. The recent launch of the Perodua Alza, the latest<br />
MPV <strong>to</strong> hit Malaysian roads was launched on November 23 2009. With the fuel price at<br />
RM1.80 and the recently adopted ruling where all occupants of a vehicle are required <strong>to</strong><br />
buckle up their seatbelts, the potential rise in the number of MPV‟s on Malaysian roads is<br />
highly likely. Unfortunately, the author wishes <strong>to</strong> point out that at the time of writing this <strong>article</strong>,<br />
the sales figures for both the Pro<strong>to</strong>n Exora and Perodua Alza were not available.<br />
Inven<strong>to</strong>ry Management<br />
Most car manufacturers have <strong>to</strong> keep some level of inven<strong>to</strong>ry. This is because the time it<br />
takes between the cars being produced <strong>to</strong> when the cars are delivered <strong>to</strong> the cus<strong>to</strong>mers may<br />
take at least 2 weeks. Some companies forecast what the cus<strong>to</strong>mers will want <strong>to</strong> buy and<br />
produce the cars in advance. In this way, a potential cus<strong>to</strong>mer may get delivery of the new car<br />
very quickly since the car is already in s<strong>to</strong>ck. However, this approach has its limitations. For<br />
example, it takes at least 3 months lead-time for the au<strong>to</strong>motive suppliers <strong>to</strong> order raw<br />
materials in order <strong>to</strong> produce the component. This is especially true when the component<br />
requires raw materials <strong>to</strong> be ordered from overseas. When the OEM has ordered these<br />
components, it has <strong>to</strong> assemble the vehicles quickly since some of these components have a<br />
shelf life and also once these components have been ordered, the OEMs need <strong>to</strong> honour the<br />
orders come what may. It is when the forecast goes wrong that all the plans go haywire.<br />
S<strong>to</strong>ckyards pile up with “the wrong cars”, cars which were built but nobody wants <strong>to</strong> buy.<br />
Typically, the ultimate s<strong>to</strong>ck level for an OEM should be about 1.5 months worth of s<strong>to</strong>cks.<br />
For example, if an OEM sells 4,000 cars a month, then there could be up <strong>to</strong> 6,000 cars in<br />
s<strong>to</strong>ck at any given time.<br />
However, the current s<strong>to</strong>ckpile of most OEMs the world over is very much higher than this.<br />
Due <strong>to</strong> this, production has been slowed down <strong>to</strong> curb the number of unsold cars in inven<strong>to</strong>ry<br />
from growing <strong>to</strong> an uncontrollable figure. In some European and Japanese car fac<strong>to</strong>ries,<br />
production has ceased since December and some companies have even given extended<br />
Christmas holidays 4 .<br />
4 “Today, it was reported BMW’s Mini plant had quietly let slip about 90 more temporary workers over<br />
the Christmas break and Honda extended its Christmas holiday shutdown all the way <strong>to</strong> June.” – “THE<br />
UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 88
Promotions<br />
January 2009 saw a very bad sale figure for most OEMs in Malaysia. In February onwards,<br />
car advertisements have been more aggressive and airtime on local radio and television<br />
media channels have also been more prominent. Cus<strong>to</strong>mers are all concerned about cash<br />
flow. Having a new car also means the loan repayments will have <strong>to</strong> continue and the<br />
maintenance will be an issue. The typical gimmick of „Zero Down-payment‟ has lost its bite. In<br />
the past, salesmen have been able <strong>to</strong> offer a vehicle of slightly lower specifications, and<br />
processed the loan documents for a vehicle with the highest specifications available. In this<br />
way, when a cus<strong>to</strong>mer buys a vehicle such as the Perodua Myvi for say RM45k, the<br />
salesman will process the loan for the same vehicle but with the higher specifications, at<br />
RM50k. The RM5k difference will be used <strong>to</strong> pay for the down-payment of the vehicle or in<br />
some cases be given back as a “rebate” <strong>to</strong> the unsuspecting cus<strong>to</strong>mers. In the end, the<br />
cus<strong>to</strong>mer has <strong>to</strong> pay for a loan which is more expensive than it could have been. Since the<br />
financial crisis, banks have been more stringent in their loan approvals, and this kind of<br />
manipulation of the system has been more closely moni<strong>to</strong>red. Hence, salesmen have <strong>to</strong> be<br />
more knowledgeable about their products and how they fare against competi<strong>to</strong>rs.<br />
Promotions best suited for <strong>to</strong>ugh economic slowdowns<br />
Among the problems facing a car owner, especially during these difficult economic slowdowns<br />
is car maintenance. When someone owns a second hand car, especially a relatively older car,<br />
there will always tend <strong>to</strong> be a problem or two which requires fixing. More often than not, these<br />
small repairs can be costly especially when they recur. Due <strong>to</strong> this, some car owners tend <strong>to</strong><br />
opt for a brand new car. The only problem is that these new cars require the periodical<br />
maintenance carried out religiously. It is essential that these maintenance jobs are done on<br />
time and at the authorized service centres in order <strong>to</strong> maintain validity of the manufacturer‟s<br />
warranty. This may burden the car owners since authorized service centres may charge a<br />
little more than the independent service workshops.<br />
In November 2008, Honda Malaysia launched a promotion called “Low Maintenance”. In this<br />
promotion that lasted 2 months, until 31 st December 2008, selected models such as the<br />
Honda Stream and Honda Civic came with free maintenance for 18 months or 30,000<br />
kilometres. That means that for up <strong>to</strong> 30,000 kilometres or 18 months, the owner will not have<br />
<strong>to</strong> worry about paying for any maintenance.<br />
This promotion is very similar <strong>to</strong> other car promotions especially in Europe and the USA.<br />
However, most promotions of this sort give only up <strong>to</strong> three years of free service. There have<br />
yet <strong>to</strong> be car manufacturers which offer up <strong>to</strong> five years of free maintenance.<br />
If a car manufacturer were <strong>to</strong> launch a car in this current economic scenario, then one<br />
possible way <strong>to</strong> do it with a “Big Bang” would be <strong>to</strong> launch a new model (at least some minor<br />
facelifts) with a revised price <strong>to</strong> incorporate the cost increase <strong>to</strong> offer free scheduled<br />
maintenance for up <strong>to</strong> five years. Although there could be a minor price increment, the end<br />
result is a value proposition that would be highly attractive. If the OEM is confident about its<br />
product quality and reliability, then it could also promote its five year warranty. Instead of<br />
selling a car, the OEM unique value proposition could be tuned and marketed as selling<br />
“Peace of Mind”. These are several benefits of having the five year maintenance programme.<br />
Firstly, the cus<strong>to</strong>mer‟s car would be better maintained since the owner would most definitely<br />
try <strong>to</strong> send in the car as soon as the scheduled maintenance is due. Secondly, the owner<br />
WEEK THAT WAS: Buckle up for a long rough ride”; Graeme Roberts, just –au<strong>to</strong>.com edi<strong>to</strong>rial team,<br />
16 January 2009; retrieved from http://www.just-au<strong>to</strong>.com/<strong>article</strong>.aspx%E2%80%A6 on April 3, 2009<br />
UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 89
would have <strong>to</strong> bring in the car <strong>to</strong> the service centre as soon as a problem is found. This would<br />
most definitely improve throughput of the service centres. Finally, since the cost of the five<br />
year maintenance has been accounted for in the price of the vehicle, the actual revenue<br />
stream for the service centres will be more predictable. Furthermore, the costs for the five<br />
years maintenance programme would have been collected at the point of sale of the vehicle.<br />
This money could be used <strong>to</strong> generate better cash preservation initiatives as well as rolling<br />
capital for other investments.<br />
Organizational Strength<br />
Like any other industry, the au<strong>to</strong>motive industry is plagued with a host of management<br />
concerns. Due <strong>to</strong> the complexity of the business it is imperative that these concerns, ranging<br />
from the product development, raw material purchases, manufacturing, sales and distribution,<br />
have <strong>to</strong> be care<strong>full</strong>y orchestrated in order <strong>to</strong> support the smooth running of the business.<br />
Therefore having an organization that works <strong>to</strong>gether between divisions well is definitely an<br />
advantage. In most cases, working in silos is a problem. Divisions find it difficult <strong>to</strong> cooperate<br />
and get a cross functional task done efficiently and effectively. However, in Toyota, the<br />
workforce culture is second <strong>to</strong> none. The culture of „Kaizen‟ or continuous improvement has<br />
been the foundation for the sustainable continuous improvements. The „Ohno‟s Circle‟ is<br />
where a manager is asked <strong>to</strong> stand within a circle drawn out of chalk. The circle is just big<br />
enough <strong>to</strong> stand in. The idea is that the manager has <strong>to</strong> look at the production line as it is<br />
running and note every little detail which could be improved. This may go on for two hours<br />
and the superior will then ask for a detailed report the following day. This is <strong>to</strong> ensure that the<br />
manager is in <strong>to</strong>uch with the shop floor.<br />
Potential Promotional Ideas<br />
To counter the concern by cus<strong>to</strong>mers that the service and maintenance costs of a vehicle are<br />
<strong>to</strong>o high, an OEM may offer service vouchers at the point of sale of the vehicle. This set of<br />
vouchers may be for as long as three years. Instead of giving the vouchers for free, the OEM<br />
may offer the vouchers <strong>to</strong> the cus<strong>to</strong>mers for a fraction of the <strong>to</strong>tal price of maintenance. In this<br />
way, the cus<strong>to</strong>mer does not have <strong>to</strong> worry about maintenance costs escalating over the years.<br />
Pro<strong>to</strong>n Edar could offer the cus<strong>to</strong>mer <strong>to</strong> buy the service package as a pre-paid deal at a<br />
discounted rate. Assumng the <strong>to</strong>tal cost of maintenance is RM1,500 for the given period, the<br />
cus<strong>to</strong>mer could opt <strong>to</strong> purchase the service vouchers at a 40% discount at say RM900 only.<br />
Since the vouchers explicitly mention the parts and labour carried out at each service interval,<br />
the cus<strong>to</strong>mer no longer has <strong>to</strong> be concerned about escalating maintenance costs since for the<br />
given period, the cost has been paid for upfront. In this way, Pro<strong>to</strong>n Edar will be able <strong>to</strong> offer<br />
the cus<strong>to</strong>mer peace of mind. In addition, this system will also guarantee that the cus<strong>to</strong>mer will<br />
come back <strong>to</strong> service the car at the recommended mileage intervals. It also provides cash<br />
upfront <strong>to</strong> Pro<strong>to</strong>n Edar and this is something very much needed at this juncture. Although the<br />
vouchers are sold at a discount, the typical profit margins for parts and labour are 40%<br />
anyway, which means that the vouchers can be sold either at cost or even slightly higher than<br />
cost and yet please the cus<strong>to</strong>mers with a large discount. In economic slowdowns, cus<strong>to</strong>mers<br />
typically try <strong>to</strong> avoid periodical maintenance on their vehicles. This can impact car<br />
manufacturers in two ways. Firstly, the throughput in<strong>to</strong> service centres will decrease resulting<br />
in a contraction of revenues. The second impact is that since the cus<strong>to</strong>mers do not maintain<br />
their vehicles, these cars may ultimately break down in the middle of the road and this will<br />
give a negative connotation <strong>to</strong> other mo<strong>to</strong>rists about the particular brand of car.<br />
UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 90
This system of prepaid maintenance is very similar <strong>to</strong> a passenger who books for an Air Asia<br />
flight and chooses <strong>to</strong> pre-purchase the baggage check-in. If the baggage is paid for on-line<br />
and in advance, the passenger gets a 50% discount. However, if the passenger only decides<br />
<strong>to</strong> bring luggage at the check-in counter without having pre-booked the luggage, the price<br />
would be significantly higher.<br />
For Pro<strong>to</strong>n and Perodua, the recently announced „scrapping incentive‟ by the Malaysian<br />
Government should be immediately and effectively exploited. In this government incentive<br />
cus<strong>to</strong>mers wishing <strong>to</strong> buy a brand new Pro<strong>to</strong>n or Perodua vehicle may opt <strong>to</strong> trade in any 10<br />
year old car (or older) for a RM5,000 cash voucher which can be used for the down-payment<br />
of a new vehicle of their choice. Some terms and conditions may apply, but in general it is<br />
hoped that with this new incentive, the sales of Pro<strong>to</strong>n and Perodua vehicles will rise in the<br />
immediate future especially during these very difficult times. The entire au<strong>to</strong>motive industry<br />
and its eco-system are in jeopardy if these two companies do not pull through during this<br />
period.<br />
SUMMARY<br />
Based on the case study of car manufacturers in Malaysia it is evident that each au<strong>to</strong>motive<br />
manufacturer has its own set of strategies that can improve sales <strong>to</strong> a certain extent during<br />
the economic uncertainties. However, the long term strategies which effectively executed<br />
such as the case with Toyota will give the maximum benefit <strong>to</strong> the organization. For this <strong>to</strong> be<br />
realised, a strong leadership coupled with succession planning is essential <strong>to</strong> ensure the long<br />
term strategies remain executed even though there is a change of leadership. In many OEMs,<br />
the strategies are designed <strong>to</strong> bring short term gains. This will ultimately look good for the<br />
current leadership. However when there is a change in leadership, the strategies take on a<br />
slightly different course and whole workforce becomes confused and lethargic due <strong>to</strong> the<br />
frequently changing directions.<br />
It is also important <strong>to</strong> point out that due <strong>to</strong> the dynamic nature of the au<strong>to</strong>motive industry, and<br />
since the <strong>article</strong> was written in 2009, some facts may have already become obsolete.<br />
<strong>Read</strong>er‟s discretion is therefore highly sought.<br />
UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 91
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UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 93
2007<br />
Model Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total<br />
Kancil 2463 2600 2604 1946 1576 1216 1323 961 728 658 699 914 17688<br />
Kelisa 1192 847 2061 1722 450 201 76 17 4 3 3 1 6577<br />
Kenari 591 691 424 590 607 466 473 468 419 394 367 335 5825<br />
A<strong>to</strong>s 328 110 295 199 663 173 384 180 110 15 1 234 2692<br />
Pican<strong>to</strong>/Suria 581 437 347 318 523 449 432 384 269 262 219 220 4441<br />
Smart 70 75 90 94 35 52 8 13 3 12 35 79 566<br />
Savvy 924 722 532 325 226 288 470 725 582 430 321 297 5842<br />
Spark 0 0 0 0 0 0 0 0 0 0 0 0 0<br />
Sutera 479 410 294 221 298 199 216 169 139 143 89 127 2784<br />
Viva 0 0 0 0 3131 6827 5860 6710 6132 5711 5254 6592 46217<br />
Others 6 5 16 7 33 48 21 31 26 21 22 12 248<br />
Monthly Total 6634 5897 6663 5422 7542 9919 9263 9658 8412 7649 7010 8811 92880<br />
SEGMENT A<br />
Model Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total<br />
Kancil 1182 613 688 705 466 475 600 606 554 369 510 347 7115<br />
Kelisa 24 179 7 1 0 0 2 2 0 33 4 79 331<br />
Kenari 207 201 367 351 341 429 447 353 310 232 265 123 3626<br />
Savvy 308 252 210 294 364 327 232 207 368 221 220 175 3178<br />
A<strong>to</strong>s 40 153 143 80 29 38 79 9 101 11 7 7 697<br />
i10 0 0 0 0 0 0 215 410 80 0 80 105 890<br />
Sutera 103 52 51 77 72 0 0 232 39 8 12 8 654<br />
Pican<strong>to</strong>/Suria 277 182 194 240 361 396 346 207 239 139 120 90 2791<br />
Viva 5156 4232 5142 6088 5681 6597 7440 6506 6294 4379 4880 5178 67573<br />
Smart 11 6 4 2 0 0 0 0 0 0 0 0 23<br />
Forza 16 15 14 36 91 0 0 219 49 23 18 4 485<br />
Others 15 3 10 5 6 1 3 1 0 1 0 0 45<br />
Monthly Total 7339 5888 6830 7879 7411 8263 9364 8752 8034 5416 6116 6116 87408<br />
SEGMENT A<br />
UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 94<br />
2008<br />
2009<br />
Model Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec<br />
Viva 4373 5200 6007 15580<br />
Kancil 277 364 595 1236<br />
Savvy 180 138 171 489<br />
Kenari 166 200 235 601<br />
Pican<strong>to</strong>/Suria 91 92 160 343<br />
i10 54 95 223 372<br />
A<strong>to</strong>s 17 24 24 65<br />
Forza 10 9 11 30<br />
Others 2 12 3 17<br />
Monthly Total 5170 6134 7429 0 0 0 0 0 0 0 0 0 18733<br />
SEGMENT A<br />
APPENDIX<br />
Table 1<br />
Registered Sales of Cars in the “A” Segment for 2007<br />
Table 2<br />
Registered Sales of Cars in the “A” Segment for 2008<br />
Table 3<br />
Registered Sales of Cars in the “A” Segment for 2009<br />
This data shows the sales of A-segment cars in 2007 through <strong>to</strong> 2009. A segment cars are<br />
defined as the small cars such as the Perodua Kancil, Pro<strong>to</strong>n Savvy and Naza Sutera.<br />
Typically the engine sizes of these cars are below 1.3 litres.<br />
Total
Table 4<br />
Registered Sales of Cars in the “B” Segment for 2007<br />
2007<br />
Model Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total<br />
Wira 1766 1459 1327 939 1104 2467 2896 2428 1300 883 638 441 17648<br />
Iswara 1695 1319 3567 3522 4432 3673 3869 5537 4572 4112 3832 3475 43605<br />
Satria/Neo 652 770 756 504 366 466 622 596 468 413 356 286 6255<br />
Putra 0 0 0 0 0 0 0 0 0 0 0 0 0<br />
Ascend 0 0 0 0 0 0 0 0 0 0 0 0 0<br />
Espri 0 0 0 0 0 0 0 0 0 0 0 0 0<br />
Cooper 6 5 2 16 22 7 13 23 9 24 12 50 189<br />
Rio 7 20 17 11 8 10 10 8 9 7 4 8 119<br />
Getz 486 277 308 100 86 601 238 269 230 340 405 243 3583<br />
Jazz 81 77 101 60 95 71 68 124 96 70 53 32 928<br />
C3 0 0 0 0 0 0 0 0 0 0 0 0 0<br />
Swift 139 108 76 39 114 52 188 320 318 290 296 214 2154<br />
206/Bestari 97 141 68 82 106 88 76 58 56 67 38 45 922<br />
Accent 101 96 97 117 81 80 66 87 84 108 51 46 1014<br />
Aveo/Notchback 27 29 25 58 79 15 8 8 3 7 3 0 262<br />
Myvi 6704 6454 7453 6469 7264 8040 7830 7640 7072 6727 7216 5837 84706<br />
Yaris 36 46 49 50 41 44 48 42 39 14 26 24 459<br />
Colt 4 2 26 21 6 4 7 2 0 1 0 0 73<br />
Sephia 0 0 0 0 0 0 0 0 0 0 0 0 0<br />
Pun<strong>to</strong> 0 0 0 0 0 0 0 0 0 0 0 0 0<br />
March 0 0 0 0 0 0 0 0 0 2 1 0 3<br />
A160 0 0 0 0 0 0 0 0 0 7 6 7 20<br />
Others 2 0 5 9 9 4 9 9 16 10 0 5 78<br />
Monthly Total 11803 10803 13877 11997 13813 15622 15948 17151 14272 13082 12937 10713 162018<br />
SEGMENT B<br />
Table 5<br />
Registered Sales of Cars in the “B” Segment for 2008<br />
2008<br />
Model Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total<br />
Myvi 8354 6663 7157 7530 7386 7185 8450 6515 8489 6500 7267 6729 88225<br />
Iswara 3715 2371 2360 1375 435 142 14 21 11 6 2 2 10454<br />
Wira 342 229 185 170 85 71 241 318 183 143 133 55 2155<br />
Satria/Neo 263 258 253 408 425 263 239 347 501 234 339 316 3846<br />
Saga 276 3269 5605 6173 6028 6180 7335 6275 7634 5861 6263 5634 66533<br />
Getz 349 211 330 117 155 126 160 310 305 26 101 123 2313<br />
Jazz 38 48 52 61 55 47 59 107 182 90 70 59 868<br />
Swift 334 248 314 381 357 365 358 346 392 267 265 189 3816<br />
Bestari 36 33 30 38 63 0 0 166 52 46 28 84 576<br />
Accent 55 31 29 30 47 17 16 32 45 55 45 39 441<br />
Yaris 21 15 12 15 9 9 9 13 11 18 7 5 144<br />
Cooper 16 13 12 12 15 22 18 25 17 28 13 12 203<br />
Rio 7 7 13 9 5 4 2 4 5 4 2 0 62<br />
SX4 58 43 27 61 42 75 92 29 81 60 45 57 670<br />
Others 4 0 13 40 55 50 27 18 24 20 13 7 271<br />
Monthly Total 13868 13439 16392 16420 15162 14556 17020 14526 17932 13358 14593 13311 180577<br />
SEGMENT B<br />
Table 6<br />
Registered Sales of Cars in the “B” Segment for 2009<br />
2009<br />
Model Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total<br />
Myvi 7049 6435 7454 20938<br />
Saga 5054 5015 5671 15740<br />
Satria/Neo 288 231 277 796<br />
Swift 228 191 297 716<br />
Bestari 202 258 428 888<br />
Getz 111 128 182 421<br />
Jazz 70 56 111 237<br />
Accent 29 24 29 82<br />
Cooper 15 12 14 41<br />
Yaris 5 8 1 14<br />
Rio 5 4 0 9<br />
Others 104 239 182 525<br />
Monthly Total 13160 12601 14646 0 0 0 0 0 0 0 0 0 40407<br />
SEGMENT B<br />
UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 95
This data shows the sales of B-segment cars in 2007 through <strong>to</strong> 2009. B-segment cars are<br />
defined as the medium sized sedans and hatchbacks such as the Perodua Myvi, Pro<strong>to</strong>n Saga,<br />
Honda City and Toyota Vios. Typically the engine sizes of these cars are above 1.3 litres but<br />
below 1.8 litres. This is the second largest segment in the Malaysian TIV, after segment D.<br />
Table 7<br />
Registered Sales of Cars in the “C” Segment for 2007<br />
2007<br />
Model Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total<br />
Waja 1357 995 1093 924 635 1092 1207 970 1005 932 985 875 12070<br />
City 895 945 693 751 1032 618 812 858 880 661 820 742 9707<br />
Civic 1100 786 712 616 976 747 829 1025 857 562 530 551 9291<br />
Sentra 399 406 429 381 345 333 316 342 345 268 186 175 3925<br />
Altis 193 138 187 149 166 272 283 379 460 475 330 42 3074<br />
Focus 51 53 26 19 15 10 0 0 11 13 11 7 216<br />
Lynx 0 0 0 0 0 0 0 0 0 0 0 0 0<br />
Xsara 0 0 0 0 0 0 0 0 0 0 0 0 0<br />
406 0 0 0 0 0 0 0 0 0 0 0 0 0<br />
Spectra 156 99 67 69 108 110 125 139 86 120 76 70 1225<br />
Vios 2089 1660 1959 1768 1830 2126 2482 1424 40 1018 3103 3252 22751<br />
Gen2 1186 1024 968 750 587 663 752 692 710 1646 1062 679 10719<br />
Elantra 21 32 31 26 23 22 14 7 10 24 30 0 240<br />
Optra 32 35 30 231 485 97 22 9 2 2 2 0 947<br />
Mazda 3 15 13 25 37 29 32 28 26 16 22 27 7 277<br />
Lancer 13 23 94 18 9 1 3 1 3 1 11 0 177<br />
Lancer GT 0 0 0 0 0 0 0 105 38 46 107 86 382<br />
C4 0 0 0 0 0 0 0 0 0 0 0 0 0<br />
Golf 0 43 19 25 37 37 42 46 33 22 37 24 365<br />
Persona 0 0 0 0 0 0 0 930 4505 4539 4364 3995 18333<br />
Matrix 106 211 382 156 112 528 269 388 479 322 690 176 3819<br />
Latio 0 0 0 2 0 88 567 630 523 312 328 241 2691<br />
MC Accent 0 0 0 0 0 0 0 0 0 0 0 51 51<br />
Others 1 19 10 8 4 15 15 23 14 20 47 19 195<br />
Monthly Total 7614 6482 6725 5930 6393 6791 7766 7994 10017 11005 12746 10992 100455<br />
SEGMENT C<br />
Table 8<br />
Registered Sales of Cars in the “C” Segment for 2008<br />
2008<br />
Model Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total<br />
Waja 775 527 535 999 974 1047 917 365 288 137 333 512 7409<br />
Persona 4146 3130 3367 4356 3399 3530 3993 3697 4452 2495 2628 3117 42310<br />
Vios 3336 2152 2779 2682 2649 2978 3045 2982 2420 2439 2642 2606 32710<br />
Gen2 784 521 339 426 314 219 264 216 277 144 241 398 4143<br />
City 985 674 1049 776 1072 1285 1064 643 698 554 557 386 9743<br />
Civic 996 650 727 685 698 776 849 872 726 394 723 526 8622<br />
Sentra 156 142 228 260 259 154 136 105 169 146 157 120 2032<br />
Spectra/5 68 43 42 50 48 100 105 41 133 176 225 259 1290<br />
Altis 4 0 327 939 862 960 900 468 508 397 390 524 6279<br />
Lancer/ GT 164 140 99 100 102 147 202 222 163 74 70 51 1534<br />
RS Lynx/Focus 20 26 5 15 26 8 5 25 0 33 3 3 169<br />
Matrix 891 156 213 125 139 218 20 56 467 77 63 104 2529<br />
Mazda 3 34 10 9 8 4 4 39 13 16 7 24 3 171<br />
Elantra 36 94 67 89 79 72 57 38 39 26 12 14 623<br />
Golf 26 39 38 37 32 38 24 17 19 8 14 22 314<br />
Latio 334 308 344 367 390 388 350 151 219 187 143 205 3386<br />
MC Accent 117 65 69 89 115 108 67 61 58 46 38 43 876<br />
Sylphy 0 0 0 0 0 70 512 438 308 250 194 150 1922<br />
Others 28 18 43 46 24 31 43 49 115 27 32 54 510<br />
Monthly Total 12900 8695 10280 12049 11186 12133 12592 10459 11075 7617 8489 9097 126572<br />
SEGMENT C<br />
UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 96
Table 9<br />
Registered Sales of Cars in the “C” Segment for 2009<br />
2009<br />
Model Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total<br />
Waja 290 317 260 867<br />
Persona 3271 2977 3334 9582<br />
Vios 1692 1915 2444 6051<br />
Gen2 480 271 170 921<br />
City 1737 1737 2344 5818<br />
Civic 1.8 448 233 277 958<br />
Civic 2.0 286 136 194 616<br />
Civic Hybrid 0 1 37 38<br />
Sentra 145 142 170 457<br />
Spectra/5 290 145 170 605<br />
Altis 1.6 82 42 59 183<br />
Altis 1.8 180 190 267 637<br />
Lancer/ GT 73 34 33 140<br />
Optra 25 36 44 105<br />
Matrix 169 60 118 347<br />
Mazda 3 7 12 10 29<br />
Elantra 31 14 24 69<br />
Golf 31 30 67 128<br />
SX4 72 64 82 218<br />
Latio HB 82 83 109 274<br />
Latio S 136 65 100 301<br />
MC Accent 45 40 43 128<br />
Sylphy 175 162 207 544<br />
Others 33 100 66 199<br />
Monthly Total 9780 8806 10629 0 0 0 0 0 0 0 0 0 29215<br />
SEGMENT C<br />
This data shows the sales of C-segment cars in 2007 through <strong>to</strong> 2009. C-segment cars are<br />
defined as the upper medium sedans and hatchback cars such as the Pro<strong>to</strong>n Persona,<br />
Toyota Altis and Honda Civic. Typically the engine sizes of these cars are above 1.3 litres and<br />
below 2.0 litres. Note that there is a very wide range of on-the-road (OTR) prices of the cars<br />
in this segment.<br />
Table 10<br />
Registered Sales of Cars in the “D” Segment for 2007<br />
2007<br />
Model Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total<br />
Camry 58 190 1220 752 607 863 849 1054 960 979 1099 892 9523<br />
Accord 374 292 161 184 160 172 179 193 246 254 188 347 2750<br />
Perdana 165 420 412 229 234 226 252 142 140 270 259 400 3149<br />
Cefiro 16 6 17 7 9 9 29 7 16 14 16 17 163<br />
Optima 20 26 19 7 17 17 13 26 25 35 11 19 235<br />
C5 0 0 0 0 0 0 0 0 0 0 0 0 0<br />
Sonata 51 120 53 66 96 157 37 22 22 43 23 23 713<br />
Mazda 6 3 10 8 7 13 11 4 7 5 5 11 5 89<br />
Picasso 8 0 0 0 0 0 0 0 0 0 0 0 8<br />
Passat 0 22 8 7 4 9 10 12 11 8 9 5 105<br />
Jetta 0 1 0 0 0 2 1 3 3 1 1 2 14<br />
Others 1 7 7 12 6 6 10 0 0 0 0 0 49<br />
Monthly Total 696 1094 1905 1271 1146 1472 1384 1466 1428 1609 1617 1710 16798<br />
SEGMENT D<br />
Table 11<br />
Registered Sales of Cars in the “D” Segment for 2008<br />
2008<br />
Model Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total<br />
Camry 922 881 1452 1415 1149 1192 1305 904 995 855 782 922 12774<br />
Accord 370 149 34 319 1257 733 995 939 851 593 743 366 7349<br />
Perdana 202 127 185 134 116 80 95 199 227 163 120 104 1752<br />
Sonata 37 25 20 30 22 18 12 6 13 5 13 5 206<br />
Cefiro 63 14 13 18 10 1 6 4 1 10 2 0 142<br />
Optima 29 17 16 19 14 18 8 44 14 12 13 6 210<br />
Passat 11 6 13 10 7 11 8 9 3 3 4 4 89<br />
Jetta 2 2 2 1 2 4 3 1 3 0 0 1 21<br />
Mazda 6 8 5 7 3 9 14 33 38 24 33 38 10 222<br />
Others 0 2 0 0 0 0 0 41 0 24 32 39 138<br />
Monthly Total 1644 1228 1742 1949 2586 2071 2465 2185 2131 1698 1747 1457 22903<br />
SEGMENT D<br />
UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 97
Table 12<br />
Registered Sales of Cars in the “D” Segment for 2009<br />
2008<br />
Model Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total<br />
Camry 441 369 656 1466<br />
Accord 804 422 479 1705<br />
Perdana 157 118 127 402<br />
Sonata 8 3 5 16<br />
Cefiro 21 0 0 21<br />
Optima 5 9 12 26<br />
Passat 5 16 5 26<br />
Jetta 3 3 0 6<br />
Mazda 6 15 35 12 62<br />
407 19 29 41 89<br />
Others 0 0 0 0<br />
Monthly Total 1478 1004 1337 0 0 0 0 0 0 0 0 0 3819<br />
SEGMENT D<br />
The data shows the registered sales of cars in the D-segment. This is the luxury sedans and<br />
include the likes of the Toyota Camry and Honda Accord This is the largest segment in the<br />
Malaysian TIV.<br />
Table 13<br />
Registered Sales of Cars in the “MPV” Segment for 2007<br />
2007<br />
Model Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total<br />
Unser/Innova 342 382 405 451 400 506 665 752 610 468 428 378 5787<br />
ERV/APV 23 25 26 23 29 35 50 24 15 14 10 23 297<br />
Serena 47 40 58 32 36 31 23 37 35 29 27 26 421<br />
Kangoo 28 22 39 61 50 52 40 29 26 10 7 15 379<br />
Scenic 0 1 2 2 0 0 0 0 0 0 0 0 5<br />
Espace 0 0 0 0 0 0 0 0 0 0 0 0 0<br />
Space Gear 0 0 0 0 0 0 0 0 0 0 0 0 0<br />
Evasion 0 0 0 0 0 0 0 0 0 0 0 0 0<br />
Berlingo 0 0 0 0 0 0 0 0 0 0 0 0 0<br />
Citra/Carens 973 725 565 403 214 776 833 1015 893 948 530 474 8349<br />
Stream 23 35 28 28 32 24 37 36 26 5 16 88 378<br />
C8 1 0 1 1 0 0 0 0 0 0 0 0 3<br />
Premacy 0 0 0 0 0 0 0 0 0 0 0 0 0<br />
Avanza 1.3 780 563 1156 1268 1045 2111 1202 1408 1164 1065 913 923 13598<br />
Avanza 1.5 921 581 792 844 1032 85 1189 1163 948 759 1265 1010 10589<br />
Nabira 1.8 0 0 0 0 0 0 0 0 0 0 0 0 0<br />
Trajet 7 39 63 33 30 147 4 0 0 0 0 0 323<br />
Multipla 0 0 0 0 0 0 0 0 0 0 0 0 0<br />
Ulysse 0 0 0 0 0 0 0 0 0 0 0 0 0<br />
Scorpio 8 6 8 8 6 0 3 2 0 0 2 0 43<br />
Mazda 5 21 11 16 8 14 7 14 14 27 32 13 13 190<br />
Wish 128 134 94 64 58 0 83 101 130 94 47 37 970<br />
Livina 1.6 0 0 0 0 0 0 0 0 0 0 0 97 97<br />
Livina 1.8 0 0 0 0 0 0 0 0 0 0 0 74 74<br />
VW Touran 0 1 0 0 0 0 0 0 0 0 0 0 1<br />
Odyssey 4 10 9 6 6 9 10 5 10 7 5 5 86<br />
Ria/Carnival 208 175 96 133 697 206 189 199 234 339 191 159 2826<br />
Nabira 2.2 0 0 0 0 0 0 0 0 0 0 0 0 0<br />
Stavic 6 4 4 1 1 3 3 1 1 0 17 0 41<br />
Previa/Estima 1 1 0 0 1 0 0 0 0 1 0 0 4<br />
Grandis 1 2 67 6 7 0 3 0 1 37 15 22 161<br />
Others 0 0 0 0 1 1 0 2 12 2 1 1 20<br />
Monthly Total (MPV) 3522 2757 3429 3372 3659 3993 4348 4788 4132 3810 3487 3345 44642<br />
MPV below 2000cc<br />
MPV above 2000cc<br />
UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 98
Table 14<br />
Registered Sales of Cars in the “MPV” Segment for 2008<br />
2008<br />
Model Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total<br />
Avanza 1.3 1091 744 857 984 955 931 933 865 997 773 584 471 10185<br />
Avanza 1.5 1028 886 1035 1016 1083 1007 832 749 929 658 622 786 10631<br />
Citra 540 456 495 594 570 472 478 419 537 217 226 207 5211<br />
Rondo 0 0 0 0 0 0 0 0 71 147 192 164 574<br />
Innova 532 399 440 465 449 674 559 490 337 269 375 428 5417<br />
Wish 28 28 45 52 39 32 60 32 49 21 31 40 457<br />
Serena 27 10 14 36 40 44 38 30 25 40 35 29 368<br />
Kangoo 11 5 6 12 7 10 0 0 10 0 2 1 64<br />
APV 8 5 2 0 3 0 0 0 0 0 0 0 18<br />
Stream 99 31 207 231 158 105 172 112 160 55 62 54 1446<br />
Mazda 5 13 11 4 1 4 3 20 19 14 10 10 9 118<br />
VW Touran 0 0 1 0 0 0 0 0 0 0 1 1 3<br />
Rush 0 0 0 756 731 808 619 376 422 230 335 368 4645<br />
Livina 1.6 458 805 609 459 333 415 596 623 860 537 468 410 6573<br />
Livina 1.8 268 401 447 371 562 571 636 830 413 405 289 240 5433<br />
Ria 170 141 145 169 170 134 98 79 88 40 51 73 1358<br />
Stavic 0 0 0 0 0 0 0 0 4 2 0 0 6<br />
Odyssey 0 3 9 6 5 2 2 4 8 0 4 1 44<br />
Previa/Estima 0 0 0 0 0 2 0 0 0 1 1 1 5<br />
Grandis 61 31 80 76 87 63 64 32 65 31 53 28 671<br />
Cherry Eastar 0 0 0 0 0 0 0 0 60 76 162 165 463<br />
Others 0 1 19 7 1 1 3 0 7 7 1 7 54<br />
Monthly Total (MPV) 4334 3957 4415 5235 5197 5274 5110 4660 5056 3519 3504 3483 53744<br />
MPV below 2000cc<br />
MPV above<br />
2000cc<br />
Table 15<br />
Registered Sales of Cars in the “MPV” Segment for 2009<br />
2009<br />
Model Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total<br />
Avanza 1.3 310 401 462 1173<br />
Avanza 1.5 614 641 870 2125<br />
Citra<br />
Rondo<br />
Innova<br />
164<br />
194<br />
285<br />
144<br />
112<br />
361<br />
535<br />
136<br />
364<br />
Source: MAA Sales Report, gained from<br />
Marketing Dision, Pro<strong>to</strong>n Holdings Berhad<br />
843<br />
442<br />
1010<br />
Wish 15 11 13 39<br />
Serena 35 23 39 97<br />
Stream 52 39 111 202<br />
Mazda 5 40 27 21 88<br />
Rush 183 144 278 605<br />
Livina 1.6 482 551 579 1612<br />
Livina 1.8 280 514 432 1226<br />
Ria 77 43 138 258<br />
Grandis 65 40 56 161<br />
Cherry Eastar 159 93 106 358<br />
Others 1 8 8 17<br />
Monthly Total (MPV) 2956 3152 4148 0 0 0 0 0 0 0 0 0 10256<br />
MPV below 2000cc<br />
MPV<br />
above<br />
2000cc<br />
This data shows the sales of MPV-segment in 2007 through <strong>to</strong> 2009. The MPV segment is<br />
defined as a people mover or multi-purpose vehicle. It is the fastest growing segment in<br />
Malaysia due <strong>to</strong> the affordability of these vehicles as well as the choices available. The newly<br />
launched Exora will face competition from the soon-<strong>to</strong>-be launched Perodua MPV later in the<br />
year. Engine sizes for this segment are typically 1.6litres and above.<br />
UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 99
Table 16<br />
Registered Sales by OEM for 2007<br />
Registered Sales by OEM<br />
2007<br />
OEM Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total<br />
PERODUA 10950 10592 12542 10727 13028 16750 15562 15796 14355 13493 13539 13679 161013<br />
PROTON 7745 6709 8655 7193 7584 8875 10068 12020 13282 13225 11817 10448 117621<br />
TOYOTA 4548 3695 5862 5346 5180 6007 6801 6323 4351 4873 7211 6558 66755<br />
HONDA 2477 2145 1704 1645 2301 1641 1935 2241 2115 1559 1612 1765 23140<br />
NISSAN 462 452 504 422 390 461 935 1016 919 625 558 630 7374<br />
INOKOM 920 598 985 455 861 1302 891 837 819 677 1096 653 10094<br />
NAZA 2338 1888 1370 1157 1838 1718 1746 1825 1591 1759 1067 1025 19322<br />
MITSUBISHI 18 27 187 45 22 5 13 108 42 85 133 108 793<br />
DAIHATSU 0 0 0 0 0 0 0 0 0 0 0 0 0<br />
SUZUKI 162 133 102 62 143 87 238 344 333 304 306 237 2451<br />
ISUZU 0<br />
MERC 363 278 419 406 375 319 306 313 288 319 340 386 4112<br />
HYUNDAI 180 287 244 242 230 406 121 116 116 175 104 120 2341<br />
HICOM 0<br />
BMW 184 146 205 357 203 123 265 298 324 358 260 462 3185<br />
KIA 183 145 103 87 133 137 148 173 120 162 91 97 1579<br />
FORD 59 59 34 27 21 10 3 2 11 13 13 7 259<br />
HINO 0<br />
CHEVROLET 59 64 55 289 564 112 30 17 5 9 5 0 1209<br />
MAZDA 39 34 49 52 56 50 46 47 48 59 51 25 556<br />
VOLKSWAGEN 0 67 27 32 41 48 53 61 47 31 47 31 485<br />
VOLVO 78 47 46 49 61 59 34 54 55 46 35 55 619<br />
OTHERS 69 77 112 126 127 157 133 114 116 83 119 79 1312<br />
TOTAL 30834 27443 33205 28719 33158 38267 39328 41705 38937 37855 38404 36365 424220<br />
Table 17<br />
Registered Sales by OEM for 2008<br />
Registered Sales by OEM<br />
2008<br />
OEM Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total<br />
PERODUA 14961 11907 13373 14684 13885 14779 17045 14116 15698 11532 12937 12476 167393<br />
PROTON 10824 10693 13049 14353 12160 11878 13357 11659 13952 9413 10297 10323 141958<br />
TOYOTA 8153 6707 9327 9851 9214 10009 10051 8288 7760 6993 7499 8009 101861<br />
HONDA 2909 1856 2516 2503 3673 3309 3511 3086 3126 1934 2456 1598 32477<br />
NISSAN 2183 2307 2353 2577 2725 2780 3146 3157 2813 2391 2261 1951 30644<br />
INOKOM 1410 604 746 475 359 333 276 430 960 167 208 334 6302<br />
NAZA 1198 944 971 1198 1368 1030 949 1336 1122 640 653 651 12060<br />
MITSUBISHI 682 533 619 707 680 709 1056 894 955 646 721 653 8855<br />
DAIHATSU 453 282 426 518 516 475 614 494 475 399 396 358 5406<br />
SUZUKI 412 351 390 491 447 511 502 411 515 349 350 295 5024<br />
ISUZU 367 300 348 474 420 378 542 477 581 406 441 525 5259<br />
MERC 362 307 371 402 350 370 533 365 342 486 370 379 4637<br />
HYUNDAI 255 252 193 318 307 507 412 668 386 164 273 207 3942<br />
HICOM 243 264 390 429 348 420 503 438 392 378 371 356 4532<br />
BMW 238 325 280 321 370 395 310 326 320 377 133 320 3715<br />
KIA 207 160 172 188 173 247 262 188 233 245 382 367 2824<br />
FORD 189 195 189 114 110 78 51 103 122 241 178 127 1697<br />
HINO 181 206 226 179 314 260 295 229 321 297 288 207 3003<br />
CHEVROLET 111 48 74 95 76 69 41 54 71 44 42 37 762<br />
MAZDA 92 60 67 63 43 68 123 92 121 75 134 47 985<br />
VOLKSWAGEN 71 72 102 92 67 88 81 70 68 36 46 111 904<br />
VOLVO 58 65 84 70 98 76 69 94 73 70 62 42 861<br />
OTHERS 269 149 170 177 228 221 255 252 323 229 367 452 3092<br />
TOTAL 45828 38587 46436 50279 47931 48990 53984 47227 50729 37512 40865 39825 548193<br />
UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 100
Table 18<br />
Registered Sales by OEM for 2009<br />
Registered Sales by OEM<br />
2009<br />
OEM Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total<br />
PERODUA 11876 12216 14298 38390<br />
PROTON 9874 9317 10198 29389<br />
TOYOTA 4844 5372 7127 17343<br />
HONDA 3815 2919 3904 10638<br />
NISSAN 2285 2389 2445 7119<br />
INOKOM 348 316 585 1249<br />
NAZA 750 666 1416 2832<br />
MITSUBISHI 585 457 670 1712<br />
DAIHATSU 312 257 312 881<br />
SUZUKI 360 283 415 1058<br />
ISUZU 323 370 369 1062<br />
MERC 303 277 380 960<br />
HYUNDAI 203 145 203 551<br />
HICOM 322 221 345 888<br />
BMW 294 270 284 848<br />
KIA 381 237 289 907<br />
FORD 93 131 131 355<br />
HINO 257 188 246 691<br />
CHEVROLET 67 57 70 194<br />
MAZDA 77 130 65 272<br />
VOLKSWAGEN 82 98 95 275<br />
VOLVO 62 39 58 159<br />
OTHERS 288 320 300 908<br />
TOTAL 37801 36675 44205 0 0 0 0 0 0 0 0 0 118681<br />
UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 101