AFTA and Malaysian Economic

Essay by duraiUniversity, Bachelor's April 2004

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Malaysia is a member of the Association of South East Asian Nations (ASEAN) and represents one of the biggest automobile markets in the region. Before the beginning of the economic crisis in 1997, Thailand was the largest automotive market within the ten-nation ASEAN, followed by Indonesia, Malaysia, and then the Philippines. But the situation has changed in 1997 and 1998, where Malaysia became the largest vehicle market, followed by Thailand, the Philippines and Indonesia. The automotive sector in Malaysia is assumed to be an engine of industrial development, provider of technological capability, and generator of inter-industry linkages (plastics, still, electronics, glass, metal, rubber, textile industry). (Venkatesan)

Malaysian Automobile industry

The history of Malaysian automotive industry goes back to early 1960s, where Malaysian government developed a policy to promote an integrated automobile industry to strengthen Malaysia's industrial base. The main objectives of the government in promoting an automobile assembly industry were to reduce imports, save foreign exchange, create employment, develop strong forward and backward linkages with the rest of the economy, and transfer industrial technology.

The government's efforts were fully reimbursed the industry. Managed to move into the manufacture of motor vehicles and component parts in the 1980s and 1990s from just being fragmented and inefficient assembly base in 1960s and 1970s and fulfilled the above mentioned goals, that is significantly contributed to the national economy in terms of manufacturing output and employment. The automotive industry was led by the two national car projects (Proton and Perodua). (Venkatesan)

History of Proton and Perodua

PERUSAHAAN OTOMOBIL NASIONAL BERHAD or PROTON was incorporated on May 7, 1983 to manufacture, assemble and sell motor vehicles and related products, including accessories, spare parts and other components. PROTON produced Malaysia's first car, the Proton SAGA, commercially launched on July 9, 1985 by Malaysian Prime Minister,