Proton among the company under Malaysia industrial development policies in the 1980’s. During that time,
it was deliberate from the Japanese and Korean model of development where tariff protection and subsidies
under our government protection which Korea and Japan had those too. The government hopes to develop
the viable industrial base that could support a rise in overall living standards where the benefits provided
will be more significant to support the cost.
In Malaysia, we fail to adopt this model as we place our hopes and shielding them from competition and
hoping they would develop in compete with other automotive manufacturer in the world. Where else, in
Korea and Japan, the automotive industry were protected from foreign competition, but were forced to
compete against each other
Below are the factors that cause the Proton unable to succeed and survive independently and compete
effectively:
Expense of cost and quality efficiency.
Proton made up a good sales trend in market in the beginning as good economical car as some buyers
considered as Japanese car at a fraction of the cost. In 2000, Proton made half of the sales in Malaysia but
there was a stiff competition from South Korea and Japan car manufacturers.
During that time, Proton was considered as out of date and the company sales decline to losses.
Proton does not aware that its declining sales due to the quality control issues which are their poor assembly
and after sale service with high maintenance cost prevent them to boost up their demand in both domestic
and export market. Furthermore low level of skills among employees and weak global marketing skills
limits them to market the car to worldwide.
Consumers are more interested in foreign cars like Toyota, Nissan, Kia and Honda due to their better
performance and quality though it’s come with high excise taxes and import duties.
Lack of technological and too volatile for competition
Proton still lacking of behind on technological, its overtake by second car manufacturer in Malaysia –
PERODUA. Proton sales declined also one of the factors cheaper and more competitive offerings from
PERODUA which meet customer need and wants. In recent year, foreign car came up with the affordable
price too which also lead consumer for the brand of foreign and the price is more competitive to the local
made national car like HONDA and Toyota.