Case Study Proton Automobiles

The auto industry in Malaysia is closely linked to the history of Perusahaan Otomobil Nasional Bhd (PROTON). PROTON was incorporated on May 7, 1983 to manufacture, assemble and sell motor vehicles and related products, including accessories, spare parts and-other components. Some researchers like, Sim (1979) and Keat and Li (1998) pointed out obstacles to production efficiency in local motor vehicle assembly operations and also in the marketing of automobiles in Malaysia. This includes diseconomy of scale associated with production oriented to a domestic market of limited size and lack of Customer focus.

Later, the Malaysian Government with the direct support of YAB Dato' Seri Dr Mahathir Mohamad, Prime Minister of Malaysia initiated the national car project.

The development of the local motor vehicle industry has had useful economic functions-generation of employment and has helped establishment of supportive industries. It has spawned a number of companies solely dedicated to making specialised accessories such as sports rims, tints, and an scores of workshops. Presently, Malaysia has become one of the region's largest auto markets and holds a dominant position in vehicle sales among ASEAN countries.

PROTON

Perusahaan Otomobil Nasional Bhd (PROTON) has come a long way from a mere car assembler to an integrated car company. The Malaysian Prime Minister, Dato' Seri Dr Mahathir Mohamad, commercially launched Malaysia's first car model, the Proton Saga, on July 9, 1985. Converted to a public company on 22nd Nov. 1990, it was publicly listed on the Kuala Lumpur Stock Exchange (KLSE) in March 26, 1992.

At present the model line up includes the variants of the Waja, lswara, Wira, Satria (including the new GTi), the up market Perdana, Tiara and Putra. The main plant in Shah Alam with an area of 862,000 sq. meters was originally designed for a capacity of 80,000 units per year and in 1997. This figure increased to 230,000 units per year with the construction of Proton's Medium Volume Factory.

Proton had been able to silence its critics who initially thought that it was irrational to establish an automobile industry in Malaysia. Quite-recently, Proton expansion plans, especially the acquisition of Lotus Engineering in 1996, have been the focus of many