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In this regard, it can be noted that Naza Kia has indicated that it intends to bring in the Kia
Forte, a C-Segment sedan which is very popular in Korea, China and parts of Europe into the
Malaysian market. Judging from the success of the Toyota Vios, Honda City and Proton
Persona, this car may have a high possibility of success since most of the cars mentioned are
also in the C-Segment Sedan category which is a very dominant category in the Malaysian
market.
The Proton Exora, Proton‟s first attempt at a Multi Purpose Vehicle (MPV) is also a very brave
move. The vehicle was launched on April 14 2009. This is the beginning of the economic
slowdown of the Malaysian economy. So far bookings have been quite positive for a typical
launch of this magnitude. Given that the economy is not at its best health, and that this is the
first MPV from Proton, especially with a 1.6 Litre engine, the number of units sold is very
encouraging. Initial reports by a select few journalists who were privileged to test drive the
vehicles shortly before the launch have been nothing but praise. But it will take a lot more
than merely journalist evaluations to secure bookings and ultimately sales of this kind of
vehicle. The MPV market in Malaysia has been growing steadily over the years. Currently,
total MPV sales is approximately 11% of Total Industry Volume and with more players
introducing MPV‟s recently, that ratio may well grow. The recent success stories have been
the Toyota Avanza, Toyota Innova and Nissan Grand Livina. It will be interesting to see how
the Proton Exora will fare in this segment. The recent launch of the Perodua Alza, the latest
MPV to hit Malaysian roads was launched on November 23 2009. With the fuel price at
RM1.80 and the recently adopted ruling where all occupants of a vehicle are required to
buckle up their seatbelts, the potential rise in the number of MPV‟s on Malaysian roads is
highly likely. Unfortunately, the author wishes to point out that at the time of writing this article,
the sales figures for both the Proton Exora and Perodua Alza were not available.
Inventory Management
Most car manufacturers have to keep some level of inventory. This is because the time it
takes between the cars being produced to when the cars are delivered to the customers may
take at least 2 weeks. Some companies forecast what the customers will want to buy and
produce the cars in advance. In this way, a potential customer may get delivery of the new car
very quickly since the car is already in stock. However, this approach has its limitations. For
example, it takes at least 3 months lead-time for the automotive suppliers to order raw
materials in order to produce the component. This is especially true when the component
requires raw materials to be ordered from overseas. When the OEM has ordered these
components, it has to assemble the vehicles quickly since some of these components have a
shelf life and also once these components have been ordered, the OEMs need to honour the
orders come what may. It is when the forecast goes wrong that all the plans go haywire.
Stockyards pile up with “the wrong cars”, cars which were built but nobody wants to buy.
Typically, the ultimate stock level for an OEM should be about 1.5 months worth of stocks.
For example, if an OEM sells 4,000 cars a month, then there could be up to 6,000 cars in
stock at any given time.
However, the current stockpile of most OEMs the world over is very much higher than this.
Due to this, production has been slowed down to curb the number of unsold cars in inventory
from growing to an uncontrollable figure. In some European and Japanese car factories,
production has ceased since December and some companies have even given extended
Christmas holidays 4 .
4 “Today, it was reported BMW’s Mini plant had quietly let slip about 90 more temporary workers over
the Christmas break and Honda extended its Christmas holiday shutdown all the way to June.” – “THE
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