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Impact Of Global Crisis Towards Malaysian Automobile Industry Economics

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The Impact of planetary crisis towards Malaysian car industry is one of the good researches that we should to look into. Malayan car industry is one of industry that contributes to Malayan GDP, Malaysian development and push industrialisation. Malayan car industry get downing since twelvemonth 1984 when Proton Saga was establishing by perusahaan automobil nasional ( PROTON ) in the market and this brand Malaysian are recognize and respectfully by Islamic state because able to bring forth its ain auto. Proton was joint- venture undertaking with Mitsubishi which a corporation of Japan.

Malayan authorities already shoot a immense capital to get down this industry and they are ever maintain making research and development how to better this industry so that will be compete with the state whom comparative advantage in this industry. The being of our ain car industry besides will diminish our dependant to imported autos and can pull foreign investor to do an investing in this industry because they trust with Malaysian capable.

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The major importers of Malayan autos are United Kingdom, Taiwan, Thailand, Japan, Singapore, Indonesia and etc.

1.2 Problem Statement

First job that I found is there is no scientific computation involves in old research for illustration computation utilizing econometric and forecasting method. The past research merely collects the informations and makes their ain judgement based on the current state of affairs or economic crisis. This will do people non dependable and inconsistent on that judgement. Second job is at that place any correlativity between economic crisis with gross revenues, production, unemployment rate and authorities intercession.

1.3 Research Objective

There is several research aims which is first we want to place whether the gross revenues and the production of car, the unemployment rate and authorities intercession will be directed effected by economic downswing. Second aim is to find whether at that place has potency of Malaysia to keep their car production when economic crisis occurs. Third is to analyze what will go on to automobile industry before and after the economic downswing.

1.4 Scope and restriction of survey

The range of this survey is merely covered Malaysian state which refers to Malayan car industry. Malaysia entire population is 29.96 million and agribusiness, service and industry was the higher part to Malayan GDP. This survey will gathered informations from 1979 until 2010. The restriction of this survey is foremost, difficult to happen the informations that related to this survey, back its deficiency literature reappraisal that related with this survey and 3rd is clip devouring that required carry throughing this proposal.

1.5 The important of job

These documents are of import for economic system development in Malaysian. To cognize whether the dependant variable that are selected are significance or non with the independent variable. These documents besides important to the research worker, pupil and authorities to better their public presentation and addition cognition while pull offing this production of cars.

1.6 Chapter Outlines

Chapter 1 will discourse about the debut of overall the impact of economic crisis towards car industry in Malaysian. In add-on, in this chapter we besides will cognize more item about car and we can understand the part of this industry to Malaysian. After read the old research, we can place the job that exists in this industry so we can develop a several aim. Last, the range and the restriction while carry oning this research.

Chapter 2 will discourse the literature reappraisal. In the literature review each of the variable are explain where the independent variable is production, gross revenues, unemployment rate, and authorities intercession. The conceptual besides include in this chapter where to demo the relationship between dependant and independent variable.

Chapter 3 will discourse about the informations and methodological analysis. What information and method will be used is explained in this chapter. Population and trying method will besides be placing. From informations, we can analysis the information and do an hypothesis development for relationship between each variable and so prove the information.

Chapter 2


2.1 Introduction

The car industry was get downing in Malaysian since 1960 when the authorities encourages local company to put up of car assembly workss in Malaysia. The chief purposes were to diminish our dependant on other state autos and to develop our industrial sector.This industry will assist to keep our economic, to make employment chance to local people and to supply the base for transportation of engineering from developing state. This industry was get downing to develop when our first national auto, proton saga was launch in 1985 by Proton Company at the local market. And our 2nd auto was made in 1994 which is perodua kancil launch by Perodua Company. The execution of the national auto undertakings was a measure towards the development of an incorporate motor vehicle industry. The undertakings have contributed to the growing of the local constituent industry, as attested by the presence of 350 constituent makers in Malaysia, of which 234 are Proton sellers and 135 are Perodua sellers. So far, the car industry has succeeded to carry throughing the authorities industrialisation attempt to better Malayan economic system.

2.2 Matrix signifier







June 2010/

Timothy J. Sturgeon

Johannes Van Biesebroeck

To analyze the impact of the recent economic crisis on planetary value ironss ( GVCs ) in the

automotive industry in developing states

Use the qualitative { authorities intercession ) and quantitative method ( the one-year growing of developing state exports auto )

First companies will call off orders, unpaid provider bills, and ‘temporarily ‘ shuttered workss. Second, Huge debt tonss, high fixed-capital costs, high labour costs, and huge pension and wellness attention committednesss to retired persons added to the Immediacy of the harm. Third is client will prorogue their purchase.

The authorities should give support during planetary crisis so the company will be lasting.


Mohd. Uzir Mahidin and R. Kanageswary

To discourse the development of the car industry in

Malaysia in footings of production and gross revenues of motor vehicles.

Use qualitative and quantitative method

The twelvemonth 1996 onwards, the car industry has been double-digit Contributor to the fabrication sector. However, there was a

diminution in the twelvemonth 1998, as the economic system was affected by the

Fiscal crisis.

Malaysia ‘s car industry has contributed to the

economic system in footings of employment, exports and gross from



Dr mohd Rosli

Malayan experience in advancing the car industry and analyze the overall public presentation of the sector.

Use qualitative and quantitative method

Automaker in Malaysian operates in extra capacity sum with exclusion of PROTON and PERODUA which late produced more than 200,000 and 100,000 of vehicles severally and the remainder company is below 50,000

The Malayan company should non concentrate merely on car industry because it would present some challenge in the hereafter.

September 8, 2000

Francisco Veloso

to supply the image of the major tendencies

taking topographic point in the automotive industry across the universe, include Asiatic and Europe

Quantitative and qualitative method

ASEAN is besides

resiling back from

the regional fiscal

Crisis. Despite the overall growing tendency, the part is made of

states with diverse

features and

Market potency.


features and


patterns are countries

That can be evaluated.

Internet preparedness is besides going an issue


Peter Wad

To cognize what the impact of the Global Economic

and Financial Crisis over

the Automotive Industry in

Developing States

Quantitative and qualitative method

Under the fiscal crisis, car industry faced dramatically diminution of gross revenues follow by cut down of production and rise in unemployment rate in 1998.

the automotive

dynamic requires spread outing markets both in footings of increasing car strength and larger populations in

driving ages. Merely big economic systems and populations ( India and China ) can afford a national market.

May 2005

Peter Wad

To analyse how trade brotherhoods in the Korean and Malaysian car industries respond to industrial

Changes during and after the East

Asiatic fiscal crisis 1997-99.

The Malayan authorities rescued the national car companies and so proceeded to make the same for the non-national car companies in 1998. The Malayan car industry bottomed out in 1998 and recovered as of from 1999.

The moral force of car employees in Korea and Malaysia besides act uponing the globalisation processes.


Ragayah Haji Mat Zin and Faridah Shahadan

To analyze how the endeavors, their workers and households, and back uping services, are impacted by the current crisis and besides the gender impact of the crisis by associating the value-chain labor-market effects.

quantitative and qualitative attack

Malayan automotive industry was promoting in 2008 when entire industry volume of new vehicles registered in Malaysia that twelvemonth reached 548,115 units compared to 487,176 units in 2007, stand foring an addition of 12.5 %

Fortunate that the auto-parts industry and its value concatenation to the workers ‘ families and the back uping informal sector are non severely affected by the crisis.


Elizabeth Tinoco

To cognize what the impact of planetary crisis on Malayan car industry.

quantitative and qualitative attack

The production of rider and commercial vehicles in 1985 and during the fiscal crisis production contracted the largest and a gradual addition is observed after 1998. However, comparatively, the impact of 1997

Crisis is much larger than the recent planetary crisis.

the industry still lacks the

competitory advantage to export into international markets due to its deficiency of technological

upgrading, particularly among parts and constituent providers and low degrees of accomplishments among



Callie W K Lau

Omar K Bashar

The aims of this paper are to measure the determiners of the demand for

cars utilizing clip series analysis and to look into the causal

relationship between economic growing and the car demand.

Unit roots trials, Dickey-Fuller trials and Phillips-Perron trials.

The car monetary values are to a great extent distorted by assorted steps

Introduced by the authorities to protect the national car. As a

consequence, the statistical theoretical accounts specified based on the basic

microeconomic theory are unable to gauge the impact of the

single independent variables on the car demand

concluded that the demand for car in Malaysia is

statistically non influenced by the monetary value of the car, the monetary value of gasoline,

the existent income per capita and the cost of borrowing

2.3 Literature reappraisal

2.3.1 Vehicle Gross saless.

( Mohd. Uzir Mahidin and R. Kanageswary, 2004 ) In the twelvemonth of 1996 onwards, Malayan car industry gives a big part to the fabrication sector. However because of the economic crisis the sum was diminution in 1998. The production volume of vehicles will be slow down depends on the economic state of affairs. In 1999 onwards the sum was back to normal. ( Ragayah Haji Mat Zin and Faridah Shahadan, 2009 ) the gross revenues public presentation was big in 2008 when the entire sum of new autos reached 548115 units compared t0 487176 unit in the route in 2007 during the planetary crisis. It was rise about 12.5 % . The Malayan automotive association prognosis that in 2008 the volume of new auto was 51000. ( Wad, 2005 ) the gross revenues of vehicles in Malayan diminution during the planetary crisis whereas proton gross revenues fell by 52 % , perodua fell by 35 % and non-national assembly programs fell by 78 % . This is will convey a bad consequence to the car industry because no part to the ( Wad, 2010 ) in Nipponese and us, the planetary economic diminution started already in 2007 and Vehicle gross revenues fell from 2006 to 2007.

2.3.2 Production of the vehicles.

( Dr mohd Rosli, 2006, the manufacturer of car in Malaysian which is perodua and proton have recent Y produce more than 200,000 and 100,000 severally. This is transcending the capacity sum that the authorities expects while the remainder company, they merely can bring forth below 50,000 yearly. ( Elizabeth Tinoco, 2010, the impact of planetary crisis on 1997 much larger than the others planetary crisis. The production of rider and commercial vehicles in 1985 and during the fiscal crisis production shows the largest sum and continuously increased after 1998. ( Wad, 2005 ) The production of proton is cut downing in a big sum which is 57 % during the planetary crisis, perodua cut down by 43 % and non- national assembly programs cut down by 85 % . This will impact the public presentation of automotive industry in the worldwide.

2.3.3 Employment and industrial dealingss during the planetary fiscal crisis

( Wad, 2010 ) in 1998 the unemployment rate is rise because the car company will retrench their employees to cut down the cost of production. ( Tinoco, 2010 ) the Malayan authorities instruct the car company to retrench their employees during the planetary crisis but the company must take the foreign workers foremost than the local workers. ( Wad, 2005 ) in Malaysian the major company in car industry consist of proton and perodua has to take their employees during the planetary crisis which is 14 % and 11 % severally.

2.3.4 Government counter-cyclical intercession

( Wad, 2005 ) The Malayan authorities rescued the national car companies and so proceeded to make the same for the non-national car companies in 1998. The Malayan car industry bottomed out in 1998 and recovered as of from 1999. ( ) The authorities announced the capital that contribute to automobile industry during the planetary crisis which is RM 60 billion that include the automotive development fund, support for the auto-scrapping strategies of Proton and Perodua. ( Jean Teh, 2003 ) the Malayan authorities besides will protect their automotive industry with import responsibility, Mandatory Deleted Item Programmed, Approval Permit policy and Local Material Content Policy ( LMCP ) . ( Challie, Omar, 2010 ) . Harmonizing to this research Malayan authorities implement a assorted policy to protect our local car industry so that the demand for autos will continuously increased. In add-on the demand for autos in non depends on consumer income per capita, oil monetary value and the monetary value of the autos itself.

2.4 Conceptual model

Vehicle Gross saless. independent variable

Production of the vehicles.

Dependent variable

Impact of planetary crisis on Malaysian car parts industry

Employment and industrial dealingss during the planetary fiscal crisis

Government counter-cyclical intercession

Chapter 3


3.1 Introduction

The information and methodological analysis used in this survey is ordinary least square ( OLS ) . OLS is method for gauging the unknown parametric quantities in a additive arrested development theoretical account. This method minimizes the amount of squared perpendicular distances between the ascertained responses in the dataset, and the responses predicted by the additive estimate.

3.2 Data, Population, and trying methods

In these documents informations was covering in times series informations from twelvemonth 1979 until twelvemonth 2010 that is 32 old ages. In term of population, this survey focuses on Malayan car industry.

3.3 Hypothesis Development

: There is relationship between production of car and economic crisis

: There is relationship between gross revenues of car and economic crisis

: There is relationship between unemployment rate and economic crisis

: There is relationship between authorities intercession and economic crisis

: There is no relationship between production, gross revenues, unemployment rate, and authorities

Intervention with economic crisis.

Cite this Impact Of Global Crisis Towards Malaysian Automobile Industry Economics

Impact Of Global Crisis Towards Malaysian Automobile Industry Economics. (2017, Jul 27). Retrieved from https://graduateway.com/impact-of-global-crisis-towards-malaysian-automobile-industry-economics-essay/

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