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that it is powered by a 1.2 litre Renault engine. Somehow, Malaysians have had a series of bad experiences with French cars. In the case of Proton, 2 earlier cars, the Proton Tiara and the Proton Waja 1.8 were also fitted with French engines. The Tiara had a 1.1 litre Citroen engine while the Waja 1.8 had a 1.8 litre Renault engine. Both these cars were very well known for the huge number of problems the cars had, including the prohibitively high cost of maintenance and spare parts. As a result, these negative perceptions were just too strong for Proton to work against. To date only about 37,000 vehicles have been sold since its launch in June 2005. Another setback was that the car was launched only weeks after the successful launch of the Perodua Myvi. Proton had not considered the Myvi as a direct competitor as it was one segment larger than the Savvy. Unfortunately, the Malaysian public did not have the same impression and a direct comparison was frequently made by customers and salesmen alike. Hence, the Proton Savvy was often at the losing end. Customers made their buying decisions based on what they knew best, and that was the interior space of the vehicle. The fact that Proton was using a foreign engine which was markedly more expensive due to the sudden increase in the exchange rate of the Euro to the Malaysian Ringgit only compounded the issue even further. The Turnaround Proton began to embark on a Business Turnaround in 2006. After the new management took over, various changes were immediately effected. There were a list of 11 main initiatives ranging from “Enhancing the Product Portfolio”, “Improving Quality”, “Improving Sales and Distribution” and “Enhancing Human Capital” just to name a few. In the initiative “Enhancing Product Portfolio”, several sub-initiatives were developed such as establishing a „New Product Introduction‟ or NPI process. This process had several gateways that had to be met diligently. By complying to this process, the management at Proton could ensure that the products developed met the necessary quality standards and equally important, Proton could sustain the manufacture of the components since the vendors in turn had to comply with the NPI. Additionally, Proton was to follow a new product development process and an element called Voice of the Customer or VOC was introduced. A new division called the Marketing Division was introduced and this division took on the daunting role of facing customers and identifying exactly what it was that they liked about Proton cars and also more importantly, what they did not like about the car. The list of dislikes was obviously very high. All these findings were then compiled and the information was then fed back to the Research & Development Division in order for the development of the new car to begin. Due to the product development efforts and the positive response to customers‟ needs and complaints, new models such as Persona, Proton Saga with the 1.3 litre Campro engine which was developed in house and Exora which enhanced customer‟s trust in the product and in the brand. Quality Assurance Another common practise among OEMs is to have Resident Engineers at the Vendor‟s site during the initial stages of production, just to ensure that the vendor complies with the basic quality requirements. A resident engineer is usually an experienced engineer from the OEM, typically from the Quality, Procurement or Production divisions, and is stationed at the vendor premises for a pre-defined period of time. The resident engineer will advise the vendor about the specific requirements of the OEM which the vendor may not already be familiar with. The Resident Engineer will normally ensure that the vendor production has stabilized before returning back to base. UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 85
Strategies Employed by Nissan Up until 2007, Nissan sales in Malaysia were almost negligible. Nissan did not have any models that were really making any impact or generating any significant interest in buyers. When the Nissan Grand Livina was launched however, sales began to see an immediate increase and the Nissan brand has become another major player in Malaysia again. The MPV market in Malaysia has been growing steadily over the years, from a meagre 13,570 units in 2001 to 53,744 units in 2008. It is within this segment that the Nissan Grand Livina has managed to gain popularity. Malaysians are not only looking for a people mover, they are looking for one that is both affordable and practical with a satisfactory level of comfort to boot. The Livina managed to fill a void that had been there for a long while. Suddenly customers were given a choice they liked and they snapped it up. Nissan had a waiting list of approximately 10 months in the initial stages of the Livina introduction. After understanding what the customers wanted, Nissan came up with 1.6litre and 1.8litre versions of the Livina. Nissan needed to introduce both variants since there was a demand for both engine types. This was clearly proven when the market share for sales in 2008 for the Nissan Grand Livina 1.6 and 1.8 were 10% and 12% of the MPV market respectively. Unfortunately, the sedans that Nissan introduced have not caught on as well as their rivals. One possible factor is the price of the vehicles themselves. Perhaps if they were marginally cheaper then they would have caught on. Another aspect is the overall size of the vehicles, which are relative smaller than their rivals, the Honda City and Toyota Vios. The primary reason why only the Livina made great impact was that the Malaysian customers were looking for an alternative for the MPV‟s available. In the case of the sedan market, the Honda City and Toyota Vios had already made a strong presence in their segment and thus new entrants would find penetrating the market to be extremely difficult. This would be compounded by the high perceived price of the car and the fact that it had yet to prove itself in terms of reliability, a convenient service network and availability of reasonably priced spare parts. LESSONS TO BE LEARNT BY OTHER OEMS IN MALAYSIA Having seen the various strategies employed by the companies mentioned above, it is a good idea to summarize what we have observed so that other OEMs can benefit from this research. The findings are discussed below. Importance to Continue Product Development Efforts For most of the Automotive OEMs, the current economic turmoil is a very alarming and troubling time. However, product development initiatives must never be neglected. Although product development poses a huge cost outflow where the typical product development cost including tooling, jigs and dies is about RM500 Million, it cannot be sidelined, especially during economic slowdowns. This is because when the economy begins to improve, car companies need a fresh product to entice buyers. Only the car OEMs with the right products at the right time will be able to capitalise on the positive economic climate. By declaring huge losses, some companies such as Toyota may have already taken into consideration the capital expenses on its product developments even though potential revenues may not be able to support that cash outflow in the same year. But the benefit is a ready and fully developed range of models as soon as the economy picks up again. All the top 5 companies UNITAR E-JOURNAL Vol. 6, No. 2, June 2010 86
Page 1 and 2: THE 2008 FINANCIAL CRISIS AND THE S
Page 3 and 4: The stimulus package as a whole is
Page 5 and 6: Currently, the approval rate for ca
Page 7: large as Toyota, which has a volume
Page 11 and 12: In this regard, it can be noted tha
Page 13 and 14: would have to bring in the car to t
Page 15 and 16: REFERENCES Bernama News Agency. (Ma
Page 17 and 18: 2007 Model Jan Feb Mar Apr May Jun
Page 19 and 20: This data shows the sales of B-segm
Page 21 and 22: Table 12 Registered Sales of Cars i
Page 23 and 24: Table 16 Registered Sales by OEM fo

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