Is there an overlapping market between national car producers in Malaysia?

• Main Authors: Drebee, Hayder Abbas, Abdul Razak, Nor Azam, Abd Karim, Mohd Zaini
• Format: Article
• Language: English
• Published: Universiti Kebangsaan Malaysia 2014
• Subjects: HC Economic History and Conditions
• Online Access: http://repo.uum.edu.my/14853/1/jeko_48%281%29-7.pdf; http://repo.uum.edu.my/14853/; http://www.ukm.my/fep/jem/pdf/2014-48(1)/jeko_48(1)-7.pdf
• Institution: Universiti Utara Malaysia

This paper examines how the choice of three broad categories of automobiles in Malaysia (i.e.Proton, Perodua, and foreign automobiles) is affected by a change in the price of a specific car model. Using a sample of 478 automobile owners in Malaysia, a discrete choice analysis is conducted based on the conditional logit model.In general, it is found that the own-price effect on Proton (Perodua) cars is negatively related to a specific Proton (Perodua) model; in contrast, the cross-price effect on Proton (Perodua) cars is positively related to a specific Perodua (Proton) model. Of the nine models evaluated, three of them show a significant overlapping market segment. This finding implies that Proton and Perodua should differentiate these products further to lessen competition between them.