Perodua company

a) Industry analysis
Malaysian automotive market can basically be divided into two segments, the local
brands(Proton and Perodua) and the imported brand . Perodua is one of the dominated
automotive companies in Malaysia whilst the balance is shared between imported brands such
as Honda, Nissan and Toyota. The dominance of Proton and Perodua in the Malaysia market
can be attributed to their effective price strategy and the governments protective policy. The
automotive industry in Malaysia is characterized by a high degree of both product and process
innovations. Worldwide consumers are paying increasing attention to the aspect of safety and
emmissions, with sustainability now being the trend in many industries. The Malaysian car
market is set for growth, supported by foreign model proliferation at competitive price points
and price reduction following market liberalisation.The industry analysis includes five forces of
analysis which are bargaining power of supplier,bargaining power of customers, threat of new
entrants,threat of new substitute products and competitor rivalry within an industry. The five
forces of analysis can determine the profit potential of PeroduA.Bargaining power of supplier,
suppliers pose a medium threat to the Perodua company. There is a threat of possible forward
integration. This means that suppliers could decide as well as the company to start installing
and distributing car parts as well as manufacturing it. Supplier concentration means that there
are only a few suppliers to provide a product to a large number of buyers.However, there
seems to be a large quantity of suppliers, so this is not a large threat.Bargaining power of
customers are medium, buyers exert a somewhat strong force in buying cars of perodua
company. The buyers are those who use and purchase the vehicles. Consumers have the
option of choosing what type of cars,colours and any additional features they want in their car
manufactured by perodua.Next,threat of new entrants, new entrants pose a high to medium
threat to the industry. This is a growing industry, so there will likely be many new entrants into
the industry in the future because it is ripe for innovation. However companies entering will still
face challenges. To compete in this industry, companies would need large amounts of funding.
They would also need marketing and networking in order to gain consumer knowledge and
demand. New entrants would also have to endure these expenses to differentiate their own
products and gain the support of consumers.In this case producing unique cars with more
additional features.Threat of new substitute product on the other hand,are high because
substitutes are very strong threat to the industry.A major substitute to this Perodua company is
Proton company which is another manufacturer of car in Malaysia.And finally threat of
competitor rivalry within an industry for Perodua is high because the number and balance of
competitor is high.The fact that industry is growing is another reason that rivalry is high.







b) Swot analysis

Perodua is one of the most dominant company in automotive industry in Malaysia.It has done a
lot of improvement in terms of additional unique features in cars that it manufacture. Among
the strength Perodua company have are it is the second largest automobile manufacturer after
Proton in Malaysia.Which produces unique and attractive small cars as preferred by
customers.It also works hard and do a lot of research and development in fulfilling the
customers need and preferrences of a car.Next is among the largest small car manufacturers in
Asia.It is listed as largest small car manufacturers in Asia which produces small cars with low
cost.And finally it has an image created as manufacturers of quality and reliable cars.It has a
collabroration with Japanese company Toyota which gives it the image of a quality
brand.Toyota is a well known car brand which produces car with very high quality and can be
reliable.Next are the weaknesses,Perodua even though produces cars which is unique and
attractive but they fail to pay attention to its safety features.Perodua are known for low safety
because of their design.Besides that,they also rely heavily on toyota any type of upgrades be it
in terms of design.In addition to that there is a very limited reach in the world market for
Perodua cars because it does not have a huge scope to compete in world market.If compared
to world famous cars like Mercedez and so on there is alot of improvement that should be done
by Perodua to reach that stage especially in terms of quality.Next is the opportunity,Peroduas
home markets are getting saturated therefore they should be looking at newer markets where
they can market their cars more aggressively.Besides that,the increase in fuel price will make
people prefer smaller cars thus Perodua will benefit from the change.Perodua produces small
attractive cars which will be peoples choice because of increasing fuel price.Having small cars
can help them save a lot.And finally,Perodua can look for new market which is more favorable
for small cars.The threats that Perodua faces are,Proton which is the competitor can overtake in
terms of R&D investments because of higher investment capabilities.Proton which is funded by
government can easily do a research as it does not have any financial implication.Next there are
substitutes with low cost being marketed.Chinas booming economic development have affected
many country,China is now manufacturing small cars with low cost which is a direct competition
to Perodua cars.And finally,the economic situations are leading to lower sales for all automobile
manufacturers.





c) Competitor analysis
Proton which is the national car is the direct competition for Perodua in automotive industry in
Malaysia besides imported cars. Even though Proton is fully supported by the government it has
its own business strategic which makes it more competitive. If we take a look starting from the
Protons future objectives, it aims to propel Malaysia into the 21st century as an industrialised
nation, where the acquisition of technological knowledge, knowhow and expertise would help
the country to be more developed. Meanwhile, Peroduas objective is to manufacture cars with
unique features as preferred by customers have become the main objective for this company.
Besides that they have also drawn out objectives such as professionalism in all their operations,
efficiency in utilising technologies and resources, resilience in meeting and uniqueness in their
products and aspiration to glorify the name of Perodua. Proton Holdings Bhd is now focusing on
high-growth markets like China, India and the Middle East. Protons current strategy in
achieving its objective is to produce right cars for the market as demanded and would take
customer expectations and regulatory requirement more seriously and pay close attention to it.
Proton assumes to expand in India and countries in the Middle East, especially Iran and Saudi
Arabia, and the African continents. It also wants its suppliers to improve their quality of
products.Proton havs more advantages than Perodua in a sense that it is first a national
company which is funded by the government.Next it has been exporting cars to other countries
and have gained advantage and opportunity to be involved in marketing of its cars. It lacks
variety in manufacturing cars, it produces the same standard car which lacks additional features
as prefered by customers.When it comes to opportunity,Proton is involved in excessive markets
and expansion abroad. There are also increases in demand for a hybrid electric vehicle by the
customers.This is an advantage for Proton because they have already made investments in the
technology. Threats faced by Proton are more low cost substitutes being marketed by Chinese
manufacturers which deviate the customers attention and also attractive features instilled in
cars by Perodua is something which is really hard for Proton to compete with.


d) Market overview
The Malaysian car market,is expected to continue growing.The hybrid segment will continue to
be a bright spot with extended duty exemption by the government,new models of cars and
growing customer acceptance.Most customers are unhappy at the taxtation which is excessive
being levelled at cars in Malaysia.Perodua is better tolerated as its vehicles are generally be
viewed as to be better built and more reliable.The unique features it have makes it more
demanding.Perodua which have once been contracted to manufacture for Toyota,its plant is
now known to conform to Japanese quality standards which Malaysian buyers trust.Most
Malaysian buyers do not put national make cars their number one choice when it comes to
purchasing a car because of their prize and not attractive features.Despite of that,the Malaysian
customers still is the generous spenders in their car purchases.The demanding tastes of
customers in terms of equipments,additional features and so on has been fullfilled by the
Malaysian automotive industry especially Perodua.Customers demand for high levels of creature
comfort such as leather seats,sunroof,keyless entry,push start,dashboard touchscreens and
various electronic aids.The current market trend for automotive industry in Malaysia are local
distributors do their best to manufacture their cars according to local condition.Lower price set
by the foreign made brands has caused an effect in the automotive industry triggering a price
war among industry players.The non national top selling models in Malaysia are the japanese
makes.Malaysian vehicles are the third cheapest in the region surpassing the neighbour country
Indonesia. The car price rationalisation exercise had already been started.It is understood to be
executed via a three-pronged approach,comprising of an immediate, medium term and long
term plan.He says further price reductions would be seen in the governments midterm plan to
reduce prices via the rationalisation of vehicle cost structure.The long term plan is to reduce
prices through operational competitiveness and higher economic of scale,adding more value
added activities in the production of cars

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