Proton Cars

Proton receives many competitive advantages from Tariff. The impact of high tariffs on imported vehicles have may prove protection of the domestic automotive industry in such a way that local producers on national cars earn higher profits due to their higher prices and increase in production. Proton also receives the reduced foreign exchange outlays- that is tariffs reduce demand of imports as the price differential makes imported automobiles unaffordable for many people. With higher government revenue that is unlike quotas, which benefit the importer or exporting country, revenues from tariffs are collected by the government of the importing country.

Malaysia’s protectionist policies have also accelerated the development of automotive components and parts manufacturing. The vendor for national cars has created new players as well as has given component parts manufacturers the scale of production necessary to become viable. Some of these vendors have also ventured into original equipment manufacturing (OEM) activities for other automotive makers and started exporting their products. Another significant advantages is the creation of second and third-tier subcontractors and suppliers.

If Proton cars want to survive, they have to fully prepare for coming years. Government has put an effort and managed to defer the AFTA. One of the measures taken by Proton is in R & D sector. They have come up with first Malaysian design car. This is a milestone in Proton, which was realized using latest technology like Rapid Prototyping and commitment by the employees. Proton is also doing research and development with Lotus engineering and Petronas Formula 1 team to come up with own engine. This moves in R &D sector is very important for them. Now they can show their own identity to the world rather than copying prototype of Mitsubishi cars. They have changed to a new logo that will give them more precise identity.

Proton also can maintain the advantages toward AFTA is by being cost competitiveness. Cost control is very important. Malaysian local cars cost is very high compare to the actual price of foreign car without tax and tariffs. So, in order to become global distributor, the price of the cars should be competitive among car giants.