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and Japanese partners. PERODUA is the one of the top company in the automotive
industry in Malaysia.
1. Competitors
Perodua has in fact only a few competitors in Malaysia. Proton savvy is the major
competitor nowadays because it is the most fuel-efficient car available in Malaysia.
Each kilometer consumes only 8sen. Savvy cost between RM 33549 and RM 43182
with a 1200cc engine. Proton's mission is to provide affordable car to customer and
they focus on being the first choice of automobile products and services. However, its
original mission was spoilt after the economic recession of 1987 when the Yen got
stronger and Japanese parts cost more.
Naza sutera is also another compact car with price range of RM35988 to RM39988
and 1100cc engine. Although it has a similar pricing strategy and technology with
Perodua, Naza Sutera had lost in terms of design which is the major factor that attracts
youngster in their buying decisions. Naza Kia objective is the commitment towards
building an efficient after sales network and achieve customer satisfaction through
quality, versality, and affordability.
Toyota Yaris is one of famous compact car due to its famous brand with reliable
performance and experience, safety features, modern design. Yaris equipped with a
1497cc engine and cost between RM52789 and RM100408 each. Some consumers
may not be able to afford the price because import cars have higher price and tax
amount than local brand. Toyota mission is moving forward because they believe
there's no best, but only being better through the passion for innovation and discovery.
Suzuki Swift is equipped with a 1490cc engine and cost around RM84146.50. Swift is
a compact car with modern design and good safety features that focus on passengers
comfortable. It consumes more fuel than Perodua's products since it have relatively
higher weight. Swift is more suitable in targeting middle and upper class consumers.
Suzuki's mission is to promote better living conditions and satisfy people's needs
through creativity and provides value- packed' products.
Honda Jazz is an extra low fuel-consumption car with its 1497cc VTEC engine. It
offers sporty looks and more space than any same level cars. Jazz cost around RM
103780 that caused it less competing than Perodua. Honda's mission is to be the
leader in motoring industy. They aimed for being recognized internationally by
winning awards worldwide.
Honda and Toyota has relatively high market share due to its famous brand,
reputations, and reliable performance and high technology. Suzuki has lower market
share than Honda and Toyota. Naza Kia have higher market share than Perodua.
Although Perodua have the lowest market share, it owns a great potential in future
market, both nationwide and international as fuel and material price are increasing in
the future.
Perodua successfully position their brand names and brand's unique benefits in the
mind of the consumers which the company produce economic, mini and compact
vehicles. Therefore, consumer will have a good perception towards the Perodua
products because of the company's performance, quality and pricing. They have a
good and strong positioning strategy among for each segment as they can differentiate
their marketing offer compare to the competitors. This can be proved by the Perodua's
vehicle are selling in a lower price, fuel efficient, sporty design, world wide quality
recognitions which is from the ISO and last but not least, it is comfortable.
2. Strategy to its competitors
Basically, it is obvious that Perodua is using the focused cost leadership strategy. This
is because Perodua is well known for its affordable and mini compact cars. It is
focused cost leadership because its market is targeting on those who prefer these mini
compact cars. Perodua did not produce big cars. Below are the details of the strategies
of Perodua towards its competitors in detail.
Local competitor: Proton
Peroduas main competitor, Proton company, is the local leader of Malaysia in the
automobile industry, same as Perodua.
Previously, Peroduas strategy was to corporate with Proton at the beginning. Perodua
gain its automobile market share of Proton in Malaysia by focusing on automobile
with low emission volume which displacement is between 600cc to 1300cc. Examples
are Myvi and Kancil. Due to the increasingly high price of patrol and the enhanced of
environmental-friendly awareness among people, Peroduas economical, small and
compact cars are becoming more and more popular in Malaysia market. However,
Perodua companys intension to merge with Proton ended in failure because both
parties management disagree with each other, Malaysian government said it won't
force two firms.
National car cannot always be dependent on the domestic market, it is necessary to
explore international market. So Perodua sought for oversea alliance to support its
technology to compete with Proton. Perodua is now controlled and very competently
accelerate business transaction process between seller and buyer and integrate all
marketing related activities. Through the intelligence computer online system, the
customer can enjoy a lot of conveniences in this online service such as place an order,
delivery, online banking, user guideline, vehicle information( colour , brand, engine
etc.), after sales service and so on.
Campaign & Promotion
Besides, Perodua is also keeping in touch with their customers by organizing some
campaign and promotions. These activities not only enhance their customer
relationship but also to attract new customers.
In-house localization
Press Parts
Engine Parts (intake manifold, cylinder head, camshaft, crankshaft,
cylinderblock)
Third party vendors, SMI (metal, plastic, electrical, rubber, sub-assembly,
others)
Opportunity
Perodua is expecting a record year in sales, anticipate investing RM1bil in the next
few years on newer models and a plant upgrade to compete in a more liberalized
automotive business in Malaysia. Managing director Aminar Rashid Salleh said the
company was re-evaluating to expand the current strategy of having just three models
at any one time and was seeking to lower costs and have more fuel-efficient engines
to deal with competition from other smaller cars in the future.
Besides, Perodua also plan to expand its operations in China for growth prospects.
The company has rolled out as one of the largest Malaysian car making company.
With the evolving trends of internationalization, the company plans to expand its
operations in China. As the company diversifies its network by analyzing the current
cultural environment of China based on demographic trends, language, culture, ethics,
morality and other cultural differences in between Malaysia and China.
Threat
The economic recession will be a big threat for Perodua. As we know, all big
company will facing over budget or does not achieve the sale for that year. The
government will lose a lot of money cause of policy and shareholders. By the way,
economic down turn actually come suddenly without notice. Substitutes also will be a
big threat for Perodua. Malaysia has to national car. The first automotive is Proton and
secondly Perodua. The substitutes will high in term of car model (some of car model
looks similar), and car spare part.
6. Recommendation
Peroduas Managing Director, Aminar(2012) said Perodua planned to increase its
export to the countries it was currently exporting and also expand its export market to
other right-hand-drive countries. The country which is not yet entered by Perodua is
India. Perodua should enter into India, given the huge domestic demand and a wellestablished infrastructure.
Competition has become fierce in Indian automotive industry, especially entry level
compact cars. Perodua should enter India through a joint venture with a partner
primarily to benefit from the distribution network and local knowledge of the Indian
market conditions. Regarding place of entry, Tamil Nadu was found the most
attractive. Ultimately, Perodua should look at long term plans of manufacturing in
India. Many of the big auto manufacturers of the World have are already in India.
Maruti Udyog Ltd., a joint venture between the Indian Government and Suzuki, is the
biggest potential competitor, offering the maximum models in different segments.
MUL has been the leader in the Indian car market for two decades. It is necessary for
Perodua to adapt their marketing mix including product specifications, to the Indian
conditions by making necessary modifications. Perodua should follow a competitive
pricing strategy as they are new entrants to the market.
Perodua also needs active and selective industrial policies when facing a downward
business cycle threatens which can destruct core capacities and competences of
Perodua in India. These policies can include stimulation of demand, upgrading of the
workforces of OEMs and their upstream and downstream value chains, and initiation
of long-term innovation projects mobilizing significant stakeholders. Domestic (and
regionally coordinated) demand expansion (DDE) policy should take priority over ISI
and EOI policies considering the uneven global automotive structure and trade.
Perodua also need to respond with traditional crisis management measures in India by
initiating upgrading exercises for product, process, functional, organizational and
eventual value chain diversification. Hence, in the future managements should
improve competitiveness and pro-actively prepare the next business cycle of boom
and burst through upgrading programs and financial consolidations with active
support of central and local governments and in collaboration with key civil
stakeholders.
Besides, Perodua is active in research and development, to be competitive in the
Indias automotive market, Perodua need to develop more highly unique vehicles
matching the culture and climate of India.
Lastly, Perodua need to strive to strengthen its management base, set up a team to
look at the marketability and to undertake a feasibility study of the new areas as well
as selecting dealers and distributors. Most importantly, Perodua need to enhance the
quality of its vehicles, push ahead with reform efforts to let it embrace a low-cost
structure and also expand exports.
Reference
1. Daihatsu Motor Co. Ltd (2010). Annual Report 2011. In Review of
Operation:Malaysia(12). Retrieved March 6, 2012 from
http://www.daihatsu.com/ir/library/pdf/annual11.pdf
2. Peter Wad & Nobuya Haraguchi (2010). Impact of the Global Economic and
Financial Crisis over the Automotive Industry in Developing Countries.
Retrieved March 6, 2012 from
http://www.unido.org/fileadmin/user_media/Publications/RSF_DPR/WP16200
9_Ebook.pdf
3. Dilip Singh Mutum, Entry of Proton and Perodua into the Indian Passenger
Car Market: Study from the Marketing Perspective. Retrieved March 7, 2012
from http://www.oocities.org/dsmutum/Research/carcos.html
4. Jagdev Singh Sidhu & (October 11, 2010). The Star Business. In Impact of the
Global Economic and Financial Crisis over Perodua wants to rev up, looking
at newer models and plant upgrade. Retrieved March 6, 2012 from
http://biz.thestar.com.my/news/story.asp?
sec=business&file=/2010/10/11/business/7189026