These two previous model is not well received by the market in B-Segment since he launching of Persona’s cars such as Periods Cancel in mid of sass and Periods Movie in mid of offs which has grabbed more interest of the middle income citizen. The latest model that has been launched by PROTON in September 2014 simply named Proton Iris is the replacement model for Proton Savvy which is targeted to be place in B-Segment market with a very affordable price. This model is directly compete with Periods Movie which has a track record as the best-selling car in Malaysia for eight consecutive year, between 2006 and 2013 respectively.
Prior to its launch, Proton Iris has been given 5-star in Adult Occupant Protection by SEAN New Car Assessment Programmer (NCAA) which reflects that this model is very safe in a very minimal of cost. Proton Iris surely has a price advantage over all B-Segment cars such Suzuki Swift, AKA Picaroon but Periods Movie still has the better price in the market. Periods Movie still priced cheaper than Proton Iris in the same type of model for example the price of Proton Iris 1. 3 Standard Manual is ARM 502 more than Periods Movie 1. EXT Manual. While the price of Proton Iris 1. Premium C.V. is ARM ,200 more than Periods Movie Extreme 1. 5. With the price range of ARMOR to ARM ASK, the Proton Iris is surely a hit among the middle income when the monthly installment could be less than ARMOR. Situation A : Malaysian government decides to reduce their subsidy on RON 95 and at the same time announce that the amount of BRIM will increase by 5% yearly starting 2015. (a) Analyze the curves affected. RON 95 is complement goods to cars, since the government decides to reduce the subsidy on RON 95, the price of RON 95 will be increases depends on the world’s petrol price.
If the price of RON 95 increases the demand for car will be decreases. The consumer will decide not to buy new car because it will be effecting their expenditure. This relation can be show as follow : The effect of changes of price RON 95 to the quantity of Proton Iris sold. Even the government will increase BRI M by 5% annually which means the BRI M for 2015 will be ARMOR. 50 only. Since the Proton Iris is in the B-Segment market which targeted middle income citizen, there increment in BRI M will not effect the demand for Proton Iris in anyway. (b) Effect to equilibrium.
When the demand of quantity of Proton Iris is decrease, the equilibrium will be shifted downward from El to E. The decrease in demand will make the demand curve to shift downward from ODL to DO. Situation B : PERIODS released their new version of IXIA to the market with new engine that saves 50% on fuel consumption. Since Periods IXIA is not in the same market segment as of Proton Iris, the released of the new version of Periods IXIA is expected to give any impact on the demand and supply of Proton Iris. The will be no changes in the equilibrium of Proton Iris because Periods IXIA is n the different market segment.
Situation C : News spread that Malaysia Government will demolish import duty for imported electric cars from Japan. Financial institutions also agreed to support the usage of electrics cars by offering a special 0. 1% interest rate to the buyers. Electric cars in Malaysia is still a new market to be venture in. The price of an electric cars for example Immunities i-Movie is still rocket high to more than ARM 130,000 which could equivalent to two Proton Iris. It is also clear that electric car is in different market segment altogether.
The targeted market for Proton Iris will only have to pay maximum of ARM ASK (with highest current interest rate of 2. 95% by Alliance Bank). Comparing to the offer of financial institution on 0. 1% interest rate, the consumer still has to pay more than the sum of loan than buying a new Proton Iris. Therefore, even if the Government will demolish import duty for the imported electric cars, it will not effect the demand for the Proton Iris since it is target a different market segment. The demolish of import duty on the electric cars will not effect the equilibrium f Proton Iris since the was no changes in demand of Proton Iris.
This is due the electric cars was in different market segment. Situation D : Malaysian Government agreed with the requested by a car seller association to bar cars more than 10 years from the road. Meanwhile, Malaysia Automobile Insurance Association lobbying the government to increase the rate of premium compact-sized cars. The demand of the Proton Iris will be increase because it is a well priced B- Segment car that cost around ARMS,OHO. Usually the consumers which own a car for more than 10 years are middle income.
