As Colin's email was not specific. I have send an email reply to him to ask him to be more specific. I received an email reply as follow:
Hello Peter,
Glad to receive your reply. I have been going through some of the papers regarding issues related to the car industry. One most important aspect i believe, is the government's priority to protect Proton even after the implementation of AFTA (ref:http://paultan.org/archives/2006/06/19/thailand-malaysia-non-compliant-under-afta/);also there are quite a number of vendors and sub-vendors of parts and accessories segment in Malaysia, most of them are "products" of Proton project. What do you think the government going to do with the Proton and the vendors? What can Proton possibly can do? Would you buy Proton with the share price dropped so low by now?
On the other note, Toyota seems to be able to capitalise on the tariff in AFTA, by constantly transporting parts and cars to and fro thailand and malaysia... maybe you can tell me more abt Toyota strategy in ASEAN countries?
Many thanks,
Please take your time...
Colin.
I used to mentioned that China is potential US of Asia while Japan is German in Asia. However, in term of automobile industry. I have difficulties to compare and benchmark China's automobile industry with US automobile industry. Similarly, it is difficult to compare Japan automobile industry with German automobile industry.
However, I find it perfectly fit to compare Japan automobile industry with US automobile industry.
General Motor Vs Toyota
General Motor used to be the largest automobile company in US and the world. However, Toyota has overtake Ford to become the world second largest automobile company in the world and largest in Asia. Recently, Toyota has overtake General Motor in a few indicator. Toyota executive closely benchmark their company against General Motor and expected to overtake General Motor to become the world largest automobile company in 5 years.
However, unlike Honda, Toyota never reveal it Afta plan to public.
In Malaysia, to be expose to Toyota. UMW is the company to be invested. Being the largest automobile company in Asia. This is a company you unable to miss in your automobile portfolio. UMW gain substantially in 1993 super bull run. Thus, this is a counter you unable to miss if you believe stock market will begin it bull run again after recent world cup.
Ford Vs Honda
Ford and Honda, both company name after their founder's name in their respective country. Honda has a comprehensive Afta plan in Asia. Where it plant in Malacca, Malaysia, manufacture some parts to be use by their plant in Thailand, Indonesia and Philippine. Similarly some model of cars also solely manufacture in Malaysia and then export to other Asean country and vice-versa.
In Malaysia, it is not easy to have exposure in Honda. As 51% of the controlling stake of Honda Malaysia held by Japan's holding company with the balance 49 share between Oriental Holding and DRB-Hicom Group.
Daimler Chrysler Vs Nissan
Chrysler, the weakest automobile manufacturer in America has merged with German's Daimler to form Daimler Chryler. Similarly, Nissan, after a huge loss with prolong recession in Japan, has merged with French's Renault.
Nissan Malaysia is the only automobile brand fully control by non-bumiputra.
South Korea catching up
South Korea companies, after electronic giant Samsung's profit over take Japan's Sony. It automotive company Hyundai has benchmark against Japan's Toyota. It is yet to be see whether Hyundai able to over take it Japan counter part. In Malaysia, Hyundai brand has slowly gain popularity while another brand Hyundai acquired after Asia financial crisis Kia also gaining popularity in Malaysia.
Malaysian really like Kia Spectra as it look like German's BMW. While Korea's SSangyong is license from German's Mercedes.
China
China market was dominate by German's Volkswagen.
Positioning of Malaysia
Malaysia manufacturing industry is threaten by China's low cost factory. This is just like Europe country a decade ago which threaten by Japanese lower cost manufacturer. Thus, we need to learn from European country....how they compete with Japanese low cost factory a decade ago.
I used to benchmark China against US, German against Japan, French against Korea.
The only European country that have automobile industries that available for Malaysia to benchmark is Italy, Sweden and Belgium.
Belgium is a headquarters of European Union as the country speak English, French, and German. German do not like to have EU meeting in French or UK. French also do not want to attend EU meeting in German or UK. But the three country willing to come to Belgium.Malaysia, have three major race which make it a perfect Belgium of Asia.
While Thailand is like Italy in term of travel industry where their capital are flood by water. However, in automobile industry. Thailand is like Belgium, without it own brand of automobile company. Malaysia, like Italy has it own brand Proton and Fiat respectively.
Malaysia's furniture industry also like Italy's furniture industry, both within top 10 furniture export country but Thailand was unlike Italy in this industry. Malaysia's furniture industry has a lot to learn from their counter part in Italy in term of design. Similarly, Malaysia's automobile industry can learn a lot from Italy's automobile company in term of design. Malaysia
automobile industry can collaborate with furniture industry to attract design expert from Italy after a lot of factory in Italy theaten by China low cost manufacturer.
While Proton has dispose off Italy's Augusta. Proton can always recruit it designer back when the company close down. Meanwhile, Proton Lotus can benchmark against Italy Ferrari while Proton can benchmark against Fiat robot manufacturing plant.
Another European country that have their own automobile brand is Swedish's Volvo. Volvo used to be more superior brand compare to Italy's Fiat. Volvo used to be considered a up market brand after German's Mercedes and BMW. Volvo, however, have strong trucks manufacturing capability. Thus, Malaysia can target trucks manufacturing rather then passenger car manufacturing. However, Malaysia neighbor, Thailand has strong trucks manufacturing capability despite do not have it own brand.
India TATA group also ha upper hand in branded trucks and bus manufacturing technology. Please note that up market brand like Mercedes also have strong trucks and bus manufacturing technology. Thus, Proton can enter trucks and bus manufacturing business to acquired technology in this area. Once it has acquired technology in trucks manufacturing. It can leveraged on this technology to enter up market manufacturing. Majority(90%) of the container haulage are Volvo brand. Malaysia has loss a lot of foreign currency to import the haulage trucks. Malaysia can save a lot foreign currency if Proton enter this market segment.
Most important thing, Malaysia should learn from Italy and Swedish company. How the company compete with low cost Japanese brand in 1980an to compete with South Korea and Chinese low cost brand.
Link: BenQ,Siemens Vs Proton , Mitsubishi
Update: Nissan to start talks with General Motors over possible alliance
Nissan, Renault and GM explore tie-up
TechnoratiTag: Business Commentary competitive Economics Economy Malaysia Opinion finance Shares Stock Market klse
